As more Americans are looking to save money during the recession, many are turning to used cars. But there are still tips used car shoppers can take to save even more money when it comes to getting a loan.

Jesse Toprak, analyst for car research and buying website Edmunds.com, told the Associated Press that car buyers should attempt to get preapproved for a loan before heading out and looking for the vehicle they want to purchase. He says by doing this a used car buyer will know how much they can spend and can potentially work out a better deal.

The Associated Press also says car buyers should be aware of their credit score before negotiating deals. A better credit score is most likely going to result in lower interest payments which could potentially save thousands of dollars over the life of the car.

Anyone can receive a free credit report once per year at www.annualcreditreport.com, according to the AP.

It seems that in an attempt to reduce monthly car payments, some used car buyers are also increasing the length of their loans. According to a recent study from Cars.com, the median length of loans increased from 48 months last October to 60 months in the most recent survey in February.

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It appears that with the state of the economy continuing to falter, Americans are becoming more open to extending the length of their car loans.

In October, the median length of loans in the U.S. was 48 months, according to a survey done by Cars.com. But in another survey from the website last month, the median loan length jumped to 60 months.

Although it looks like car buyers are becoming more willing to spend up to 60 months to pay off their vehicle, the survey finds that a growing number of people are actually extending the length of their loans beyond the five year mark.

The survey from Cars.com finds that the amount of people with loans of either 72 or 84 months increased from 10 percent in October to 26 percent last month.

Patrick Olson, editor in chief of Cars.com warns that taking loans of this length has consumers running the risk of being underwater.

“Obviously, the economy has consumers looking for ways to save by extending loans and cutting monthly payments,” Olsen said. “However, the real risk with that is consumers may wind up upside-down on their loan, owing more money on the car than it’s worth.

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A new plan from the federal government may soon make it easier for Americans to get access to loans which can help in the purchase of a used car.

The program from the Federal Reserve and the Treasury Department, called the Term Asset-Backed Securities Loan Facility (TALF), would inject $200 billion into the financial system which could lead to an additional $1 trillion in loans, including auto loans.

Industry experts hope that the influx of government funding will unclog the credit market and allow Americans to more easily obtain car loans.

Federal Reserve chairman Ben Bernanke told Congress this week that TALF, which will begin later this month, will have a positive effect for consumers in the very near future.

“We should see immediate benefits to students, to credit cards, to small businesses, to consumer loans,” Bernanke told lawmakers.

Although it has become more difficult for many people to obtain loans due to the current credit crunch, lenders say there are still loans available for people looking to buy a used car.

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The credit crunch has made it more difficult for potential car buyers to get funding to make the purchase of a used car. But that doesn’t mean that it’s impossible.

According to TheDay.com, banks small and large say it is getting easier to get a loan to purchase a used car, although some lenders are being more conservative with their funding.

Cheryl Dunaj, vice president of retail services at Groton, Connecticut-based Ledge Light Federal Credit Union says the lender has contacted sellers in the area to let them know they have money to lend.

“We’ve been able to do loans that otherwise would not have been able to get done,” Dunaj told the website.

The company’s CFO, David Sacco said that more goes into the decision to lend than just a person’s credit rating. He says the lender will “still look at people and make decisions on what is going on in people’s lives and not (just) their credit score. Unless we give them money and try to get them back on their feet, the economy is not going to change.”

If people can get funding it’s a good time for them to buy a used car as the National Automotive Dealers Association recently announced that used car prices fell in every category in the last year.

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The economic downturn may have made it more difficult for some people to get loans for a used car purchase, but there are ways to get a loan approval.

There is hope that a new economic stimulus package will open up the purse strings of lenders, but even if that doesn’t come to pass, Edmunds.com says there is money out there to be had.

Jesse Toprak, Edmunds.com’s executive director of industry analysis said that although consumer confidence is low and people are avoiding big purchases, there are loans available. He also says this is a great time to make a car purchase.

“If someone needs a car, they know the market is down, and this is a great buying opportunity,” said Toprak.

The website says buyers looking to secure credit should take a three-pronged approach which includes trying to optimize their credit score, coming up with a plan of getting the loan and then having dealers and lenders work together to get the loan for you.

Although there seems to be a never ending barrage of bad economic news, the current state of the economy could be good news for car buyers. According to the Dow Jones, used car prices have dropped 8 percent in the last year.

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During this credit crunch it’s more important than ever for car buyers to know what they’re doing when financing the purchase of a used car. AOL Autos gives some tips on getting the best deal possible.

It’s important to know what you’re getting into before you even start your used car search. The website suggests applying for loans at a local bank or credit union along with some places online, this way you know what your options are before even looking at a car.

The site also suggests keeping your guard up when doing your shopping.

“The deal doesn’t conclude until you drive the vehicle off the dealership’s lot,” writes the site. “So despite how friendly the business manager may seem, remember that she’s there to make as much money as possible for herself and the dealership.”

There may be additional help for people looking to finance a car purchase with the recently passed economic stimulus plan.

As the economy has soured, many lenders have tightened their wallets, but portions of the stimulus bill are aimed at opening up lending which may make it easier for people to get the loans they need.

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