Is the dealer marking up your interest rate?

Yes. The CFPB says the rate is negotiable, just like the price of the car, and that dealers might not offer you the lowest rate you qualify for. Negotiating can be as simple as asking whether these are the best terms they can offer, or pointing to a lower rate from another lender.

The CFPB also says most dealers send your application to about five lenders, then pick one loan to show you. Ask whether there were other offers with lower rates or better terms.

It works. In an FTC study of car buyers, most people thought they couldn't negotiate the rate. Some turned down rates higher than they wanted to pay, and the dealers came back with lower ones. The FTC adds that you can negotiate before or after the dealer runs your credit application. And even after you talk the dealer down, you can still use the loan you brought.

A preapproval from a bank, credit union, or other lender shows you a rate, a loan length, and the most you can borrow. The CFPB says going straight to a lender tends to be cheaper because you avoid the dealer's markup. You don't have to use your own bank, and the FTC says lenders can preapprove you even if you aren't a customer or member.

A preapproval also puts pressure on the dealer. The FTC's study explains that with an outside offer in hand, the dealer has a reason to find you a competitive loan and less room to add to the rate.

• Ask for the preapproval in writing, with the APR, loan length, and maximum amount.
• Check that the amount covers the car plus taxes and fees. In the FTC study, some buyers' preapprovals came up short, so they took the dealer's loan.
• Ask the dealer about carmaker financing deals too. The FTC says these low rates usually aren't negotiable and may need strong credit, a bigger down payment, or a shorter loan.
• Ask whether a low-rate deal means giving up a rebate. A few buyers in the FTC study had to accept a higher rate to get one.

Not much, if you keep it short. When a lender checks your credit after you apply, that's a hard inquiry, and the CFPB says hard inquiries can affect your score. But the CFPB also says getting quotes from several lenders generally won't affect your score. Keep your shopping within 14 to 45 days, and those credit checks count as only one inquiry. To be safe, do all your loan applications within 14 days.

Soft inquiries, like checking your own credit reports, don't affect your score at all. Here's the order to go in:

1. Check your credit reports first and dispute any mistakes. The FTC points to AnnualCreditReport.com for free copies.
2. Ask each lender whether its quote uses a soft or a hard credit check before you apply.
3. Do your loan applications, including the dealer's, close together.
4. Get the car's out-the-door price in writing before you talk financing with the dealer, as the FTC suggests. Then let the dealer run your credit.

If the dealer says your score came back lower than you expected, ask which credit bureau, score, and date it used, and get the new terms in writing. See what to ask when your score is questioned.

The APR is the loan's yearly cost, including the interest rate and required fees, so it can be higher than the interest rate. The CFPB says the Truth in Lending disclosure must show the APR, finance charge, amount financed, and total of payments. It often comes with the contract, but the CFPB says to ask for it before you sign. You can even take it home to compare offers, says the CFPB.

Put each offer side by side for the same loan amount and length:

• APR and loan length in months.
• Amount financed. Make sure no add-ons you didn't choose slipped in.
• Finance charge and total of payments.
• Any prepayment penalty. The CFPB says you can ask to have it removed.

Watch the loan length. The FTC says lower payments often come with longer loans and higher rates, which raise your total cost. With a long loan, you could also end up owing more than the car is worth. See how the loan length changes the total.

Before you sign, check that the APR and every number match what you agreed to. Don't rely on an earlier worksheet or a spoken promise. Make sure every blank is filled in, and leave with copies of everything you signed.

Rules vary by state. California, for example, limits how much a dealer can be paid out of your loan's finance charge. On a loan of 60 months or less, the cap is what 2.5 percentage points of APR would bring in. On a longer loan, it's 2 points. There are a few exceptions. Read California Civil Code §2982.10.

Wherever you live, the way to keep the markup small is the same: bring a competing offer and ask the dealer to beat it in writing. The CFPB says comparing offers and negotiating can save you hundreds or thousands of dollars over the life of the loan.

A lender also can't base your loan terms on your race, color, religion, sex, or marital status, among other things. That's the Equal Credit Opportunity Act, the CFPB explains. If you have a problem with a loan, you can file a complaint with the CFPB.