Some good advice from SmartMoney on first-time car owners. Actually, unless you have very poor credit that you cannot get a loan elsewhere, it is almost never a good idea to get financing from the dealership.

The auto-financing department is the dealership's cash cow. Dealers make money by keeping as much of the spread between the interest rate they get from the manufacturers and the rate they offer to their customers. As you might imagine, giving you the most competitive deal is not in a salesperson's best interest.

So do yourself a favor and shop around for financing before you walk onto the car lot. Credit unions and even traditional banks often offer consumers competitive deals. Indeed, you might even want to secure a blank check from the bank to take with you to the dealership. That way, you can put the heat on the dealer to beat the rate you've been given.

If you can't find a competitive auto loan, you might want to consider paying for a vehicle with a home equity line of credit (HELOC), says CarsDirect.com's Mark McCready. In the world of consumer loans, HELOCs typically offer the lowest interest rate. The average HELOC ranges from a quarter to a half a percentage point above the prime lending rate, which currently sits at 4%. On top of that, the interest is tax deductible. The catch is that the rate floats and will rise each time the Fed raises interest rates. An auto loan, on the other hand, offers a fixed rate.

Which loan is best? That depends on your tax bracket as well as your outlook for interest rates. If you think rates will head up sharply (not a widely held belief at this point), the fixed-rate auto loan could be the better choice.