It’s easier than ever to qualify for an auto loan directly through the car dealership, but that isn’t exactly good news. It can be tempting for borrowers to finance a car through a dealership, especially if they are advertising deals for people with bad credit. This is how an increasing number of people are getting stuck with double-digit interest rate auto loans. They fear they won’t be approved for loans anywhere else, so they trust the dealer’s financing department to find them a good deal.

Dealers want you to think you are getting a great deal. They may do that by promising to lower your monthly payments. In reality, they are probably only extending the term of the loan. That spreads out your payments over a longer period of time, which makes them appear smaller. But that also means you’ll rack up interest charges over a longer period of time. According to the recent data from Experian, auto loan rates for subprime borrowers (those with credit scores under 600) are 15.25% for a used car and 11% for a brand new car — three times as high as the rates for borrowers with good credit.

The troubling thing about this strategy is that it’s working. According to a recent MagnifyMoney study, we found 82.6% of auto loan borrowers who took out a loan with a term longer than 5 years did so just to lower their monthly payment.

Overtime, so much interest may pile up that you find you owe more than the car is actually worth. If you need to borrow money for your next car purchase, shop online or visit your credit union first. When you walk onto the lot, you can give the dealer the chance to beat the interest rate.

If you’re already stuck with a bad auto loan, there are steps you can take to get out.

Know your car’s value. You can look up the trade-in value of your car on sites like Kelly Blue Book. If the value is less than what you owe on your auto loan, you know it’s time to take action.

Whatever you do, do not go back to the dealership and agree to roll your old loan balance into a new car loan. All you’re doing is creating an even bigger pile of debt in the process.

Refinance at a lower interest rate. You may be able to refinance the original auto loan, which can reduce your rate. You may have the best chance of getting approved by working with a local credit union or community bank.

Improve your credit. It can be difficult to qualify for a good refinancing offer if your credit is poor. There are some simple steps you can take to improve your credit over time. Also, be sure you know your credit score before you shop for loans. It may not be as low as you think. Discover has a free FICO score tool that anyone can use. Once you know your score, you can track your progress for free through sites like

Negotiate your loan terms. If refinancing through a different lender isn’t an option, you can try to renegotiate your loan terms with your current lender. If the lender isn’t willing to budge your interest rate, they may agree to shorten the term of your loan. That will increase your monthly payments but you’ll save more money over time. Paying off your loan in larger chunks over a shorter period of time will help reduce the amount of interest you pay over time.

Sell your car. Sometimes when you’re stuck with a car that is worth less than what you owe on it, you have to cut your losses and sell. This will, unfortunately, still leave you with a loan balance to pay off. In that case, you can look for ways to earn additional income to help pay down the loan balance faster. Think about raising funds by selling another valuable item or asking a friend or family member for a small loan. There are personal loans that can help cover the remaining auto loan balance, but they can be difficult to qualify for if your credit is poor. You may also be able to refinance the remaining balance.

MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.