The United States continues to emerge from the the recession, and there are promising signs that consumers may once again be ready and willing to purchase new and used cars. According to The Associated Press, a new study conducted by Equifax found that that auto loans rose by 20 percent in the first quarter of this year compared to the same time period of 2010.

Among the findings, researchers noted that March was the biggest month for auto loans in quite some time. Consumers opened 1.8 million new loans, which is the biggest number in almost three years and even outdid the the 1.6 million loans that were taken out during the Obama Administration's Cash for Clunkers program in 2009.

Despite the increased opening of loans, the news source reports that sales grew modestly in June, likely an indication of apprehension over the unstable economy and relatively high gas prices. Still, the growth in loans demonstrates a boost in consumer confidence, and those who are thinking about taking out a loan may want to consider a few things first.

The most important thing to figure out is how expensive of a car you can afford. While it might be tempting to purchase that flashy sports car, especially since living outside one's means is one of the reasons the U.S. got in to the economic crisis it did, the better option may be to settle for a modest sedan.

Even still, many people may be unaware of what exactly their limits are when it comes to a loan. Experts suggest a simple mathematical equation to determine the ceiling. To start, figure out your maximum monthly payment, and then calculate out how many years you'll spend paying off the car. From there, multiply the years by 12 (to get the number of months). Then, multiply the monthly payment by the number of months to determine your total limit.

Of course, once you've figured out your maximum loan, your job is not over. Cars.com recommends shopping around as much as possible, as not all lenders are created equal. Specifically, make sure you compare interest rates of credit unions versus banks. You should also be sure to look into organizations that offer incentives like discounts for early payoffs, and be wary of ones who might charge you hidden fees.