There are several ways to take ownership of a new or used vehicle. For instance, you can buy or lease new vehicles as well as some used ones. Plus you can take out a loan, charge the entire balance or part of it, or use a line of credit to finance your purchase. To find out which choice of financing would be a good fit for your budget and wallet, here are some basics about car loans to help you decide.

1) Begin by taking a look at your budget. It you don't have one, sit down with a banker, trusted adult experienced in this area or other person, and write one up for yourself, your family. Determine an amount that would work for a car payment. Things to look for are an amount you are comfortable making each month plus an amount you can put down on the car's purchase in order to pay a little something down to keep your payments lower. If you cannot afford payments, you would either need to sell your older car or find other means of financing - like family help. Or forget about this for now, and instead, earn income to stash away for this purchase at a future date.

2) When you apply to finance a car, financial companies will search your credit history. This is a report on how you have paid your loans including credit cards to date, with timely payments or late ones, etc. Your credit review will be given a credit score which allots points to certain areas and aspects of your credit history. For example, if you have been making late payments, you will rack up more points on your credit score - -bad. The higher the score, the worse your chance of getting a car load. For more information on this, seek help from your banker or online sites like Bankrate.com .

3) Your checking and savings account histories will also be researched. If you have bounced checks in the past, this is also considered bad and could hinder your car loan's approval.

What You Want to Research

When the time comes for you to do your own research on the financing you would like for your vehicle, look for the following:

a) Rates - Find out the interest rates being offered. Credit cards are normally high. If you get a low introductory level rate, read the fine print and find out what happens after the intro period is over. You want the lowest rate you can get throughout the life of your loan, not zero percent for 6 months with a super high rate for the last 4.5 years.

b) Fees - Look at closing costs, leasing fees, balance transfer fees on credit cards (these can be high), late fees should you run behind in payments, pre-payment fees in case you want to pay your loan off early, and other fees that may seem "hidden."