Considering a car loan? If you’re looking to get a new ride for summer drives, consider these tips before you sign on the dotted line.

1. A loan from a car dealership isn’t always the best financing option. You may get a competitive loan through a car dealer, but it might not necessarily offer the best terms. Shop around and compare the terms and conditions offered by several lenders, including your own bank.

2. Know what affects the size of your regular car payment. The down payment, the length of the car loan term, the price of the car and the interest rate are all factors that determine your monthly payments.

3. Understand negative equity. Negative equity describes a situation in which you owe more on your car than the vehicle is actually worth. You reduce the period you’re in negative equity by making a larger down payment or by buying a car you can reasonably afford and opting for the shortest loan term possible. You should also be able to reduce your negative equity by avoiding trading in your vehicle early.