During negotiations, your salesperson may say he can offer you a lower price on your auto if you'll finance the purchase through the dealership.

That's a sign to be very careful. Your salesperson may be hoping to recoup any discount in price through a finance charge markup.

That's when the dealership adds 3 percentage points -- sometimes more -- to the interest rate one of its lenders is willing to charge you.

Here's how it works: You apply for a loan through the car dealership, which sends your information out to four of five finance companies it regularly works with. They check your credit history and come back with an offer. The best says you're eligible for a loan with an 8% annual interest rate. Only the car dealer tells you the rate is 11%.

On a $22,000, five-year loan, that extra 3% adds $1,935 to your payments. The lender collects the money and sends anywhere from half to all of it back to the dealer.

That's why it's critical for you to know what the average auto loan costs, and have a loan lined up, before you go car shopping.

Have a question about cars or your finances? Ask us at editors@interest.com