DETROIT — In a recent survey, GMAC discovered that the majority of consumers are well-informed about the vehicle-purchasing process; however, executives said shoppers could take more time to understand their credit scores before reviewing financing options. Meanwhile, AAA reports that many consumers continue to be upside-down on their car loans, or owing more on the vehicle then it is worth at the end of the loan.

GMAC found that 70 percent of survey participants believe they knew how to get the best deal for their money at the time their first vehicle was purchased. Additionally, 66 percent were correct when they told GMAC that the best way to lower a monthly payment is to make a larger down payment. Furthermore, 83 percent of consumers surveyed realized that a monthly car payment should not exceed 20 percent of take-home pay.

Despite being well-informed, many consumers told GMAC that they plan to look up more information about the vehicle-buying process online; and 49 percent said they had already conducted online research when they purchased their most recent vehicle.

After compiling the survey statistics, GMAC highlighted the fact that 72 percent of respondents did not check their credit reports before making a purchase.

"Buying a vehicle is a major financial decision, and it is important that consumers fully understand how their credit records factor into their ability to finance a vehicle," said Bill Muir, president of GMAC Financial Services.

"This survey highlights the value that companies like GMAC and GM dealers provide as they continue to educate people about the fundamentals of personal finance and give them the knowledge they need to get the vehicle that best fits their budget," he continued.

GMAC has launched a public education campaign called SmartEdge by GMAC to assist consumers in better preparing and setting realistic budgets when it comes to their purchase.

The program is conducted in conjunction with GM dealers and other partners to offer consumers help in understanding auto financing, including what is negotiable at a dealership, in addition to explaining personal credit, executives said. This program is also designed to assist consumers in deciding whether to buy or lease a vehicle.

"A well-prepared customer is the best customer to have," said John Jones, principal owner of Greenfield Pontiac Buick GMC in Milwaukee, Wis. "SmartEdge by GMAC allows dealers like me to help ensure our customers have all the information, tools and resources they need to take control of their finances before they make a purchase, and help them make vehicle-financing decisions that they will be able to sustain over time."

SmartEdge provides seminars for consumers throughout the country. Written materials and videos are available at

While GMAC was surveying consumers, AAA also released data discussing how consumers are doing in the auto finance arena.

As interest rates rise and gas prices remain higher, AAA said these factors are leading consumers to extend the length of their loans in order to get the new vehicle they want and maintain a lower monthly payment.

More than half of new-car loans were for five to seven years in 2005, up from 22 percent in 2000, according to AAA.

AAA executives pointed out that even though monthly payments are smaller when consumers extend the length of their loans, over the long run, consumers end up paying more in interest.

"Consumer debt is at an all-time high," said Bill Gerhard, director of AAA Financial Services. "For many buyers, the only way to make a car affordable is by extending the term of the loan, but that causes a host of other problems."

As many in the industry are aware, the top problem most commonly caused by lengthening the loan term is the consumer ends up upside-down, or owing more than the vehicle is worth when it comes time to trade-in five or more years down the road.

"Being able to drive your dream car involves more than just making the monthly payment," said Gerhard. "You want to make the best decision on both the car and the financing."