The concept of capitalism has taken a bit of a beating the last few years, but that doesn't mean you should abandon it. The core element of the concept – competition – is something you must take advantage of if you want to get a good deal on a loan for your car purchase.

Getting a good deal or bad deal is part negotiation, but mostly a matter of supply and demand. When there is high demand for a product, the price goes up. Consider the personal computer. There was a huge demand 10 years ago and buying them would set you back well over a grand. Now? Demand is much lower as people flip to smart phones, laptops and what have you. With demand diving, the cost of  the personal computer has fallen from the $1,500 to $2,500 range down to $500 to $1,000! That is supply and demand in a nutshell.

Getting a good deal on an auto loan is all about creating competition. If you walk into the bank that has your checking account, the offer on an auto loan isn't going to be very good. Why? There is no competition. It is just you and the bank. The deal won't be horrible, but you can definitely do better and you should know as much.

A far better approach is to present your application to numerous lenders through clearing houses. This is where the internet has really helped consumers. There are numerous sites where you can do an online application and it is shown to numerous lenders. The lenders know that they are competing against each other. Guess what happens? The terms they offer on the loan are the best you are going to find because there is a small demand [just you] and lots of supply [many lenders looking at your application].

If you are sick of bank bailouts and the like, don't handle your auto loan application in a manner that is going to give them more of your money than necessary. Create competition to get the best deal by shopping your application.

Thomas Ajava provides consumer advice for online car loan issues and other auto finance topics at CarLoanFinanceCompanies.com.