If you ever hear a new or used car dealer ask you, "What do you want your monthly payment to be?" a little red flag should go up in your mind. That's because buying based on a target monthly payment is a surefire way to get locked into a loan that's a bad deal. A dealer can wheedle the term of the loan and other factors to shoehorn many loans to fit a certain monthly payment range.

In reality, the total cost for the loan will be much more than it would be if you negotiated on price alone. If you have ever fallen into this trap, you should check out Edmunds.com's DealSmart service. The subscription service helps you become a savvier car shopper. A free trial is available.

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