Getting a new car requires that you make good decisions about your vehicle and your finances. Fortunately, there’s a way to make the financial part much easier: get a pre-approved car loan before you start shopping for cars. Learn how pre-approval works so that you can focus on your new vehicle’s features, benefits, and price – instead of worrying about financing.
Why get pre-approved?
When you get pre-approved for your auto loan, you find out what lenders are willing to do for you, you gain negotiating power, and you avoid last-minute surprises (which often come after you’ve spent time and energy on a deal). What’s more, you can keep your options open – there’s no obligation to use a lender that pre-approves you – while getting valuable information.
Know the numbers: Getting pre-approved gives you important details, such as:
How much can you afford? In more exact terms, instead of searching for the right car, and finding a loan according to that specific price, a pre-approval will indicate the amount of money you can actually borrow, taking into account your affordability and credit profile.
How much are monthly payments at various purchases prices? Don’t let the sales staff figure this out for you – they can ‘massage’ the numbers to make a purchase look more appealing (while at the same time it becomes more expensive).
Increased buying confidence: You can take a more reasonable approach to the whole process of car browsing as you already know what kind of vehicles to base your search on. Additionally, having peace of mind that you have the money pre-approved allows you to act fast when that right vehicle comes along.
Shop like a cash buyer: When you get pre-approved, you’re buying a vehicle on price – which is the most important factor. To get the best deal, you need to do two things:
1. Pay the right price for the car, and
2. Pay as little interest as possible (assuming you’re not paying cash – either way #1 is essential)
Smooth sailing: If you’ve gone through the pre-approval process, you can buy whenever you’re ready. Other buyers may find out about significant problems in their credit reports at the last minute – but you will have already cleared up any issues. You can do your shopping and buying all within the same day if you want.
All in all, getting a car loan pre-approval is worth it, because the benefits far outweigh the drawbacks. With a pre-approved loan, you are sure you will have the money you need to acquire the car you dreamed about.