When purchasing a new or used car, there is a great temptation to shop based on monthly payment alone. After all, you probably already have a good idea of how much you can afford to pay each month, and it is all too easy to simply allow the car dealer to tailor a deal based on that amount.

It is almost always a mistake, however, to let the monthly payment be your only guide. Doing so can be quite dangerous, and quite costly. Many dealers will artificially inflate the price of the car, or the interest rate, while making the calculation, and even if the dealer does not do this, it is probably possible to strike a better deal by treating the car price negotiation and the car financing negations as two separate entities.

In most cases it is a good idea to negotiate the price of the car first, and it is always preferable to negotiate based on the dealer