Illustration: Deadline Newsroom

When you walk into an auto dealership, consider packing your own financing.

It'll give you more bargaining power and greater flexibility.

"Better to arm yourself with separate vehicle price information and auto loan financing options before you enter the dealership so you can best protect yourself in the negotiating process, similar to the way you would if you were purchasing a home," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Consumer Reports says a guaranteed auto loan in your pocket also helps you avoid a common sales tactic -- mixing vehicle price and financing negotiations.

"Don't be drawn into doing this. The tactic gives a salespersons more latitude to give you a favorable figure in one area while inflating a figure in another area," according to Consumer Reports' car buying advice.

If you insist on letting the dealer finance your vehicle, Consumer Reports advises locking down the price first, but be aware of what you are buying:

• Loans from a dealer are retail sales contracts. The contracts are a service the dealer signs with you, but then sells to a bank or other financial institution.

• Because dealers get a cut of the interest rate, the higher the annual percentage rate (APR) the more they rake in. There's a built in incentive to bump up the rate.

• Of course, if you can get zero-financing or reduced-rate financing subsidized with a low APR from the manufacturer, you'll probably get a good deal. Aggressively low interest incentives are common, but often earmarked to specific models.

In any event, you'll need to know the going rate to determine a good deal from a bad one.

The average four-year new auto loan of $25,000 has an average 5.94 interest rate, according to the Nov. 17 interest rate review by Informa Research Services a market research, analysis, and intelligence gathering service for the financial industry. Informa also said rates for the four-year new auto loan were as low as 3.49 percent.

The shorter the term, the lower the rate. A five-year new auto loan for $30,000 came with a higher average 6.01 percent interest rate, according to Informa. The low rate in this category was 3.69 percent.

Rates also trend higher for used vehicles. Informa reported Nov. 17, the average rate for a four-year $15,000 loan was 6.37 percent, with a low of 3.69 percent.Compare the latest rates for three-, four- and five-year auto loans from a host of lenders on Erate.com.

Once you've got the going rates, shop around.

Again, unless the auto dealer offers a bargain manufacturer-subsidized rate, you'll likely find a better deal elsewhere.

Compare interest rates at various financial institutions, such as banks, thrifts, and credit unions, as well as the dealership.

If you've got home equity available, include a home equity line of credit (HELOC) or home equity loan in your comparisons.

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• Negotiating used car prices