The pre-approved auto loan really can be your best friend when you go into the dealership. When you have the confidence that you have the money you need to shop, and you have that part behind you, you can really shop with ease. You know all those dealers that have the bad credit, or no credit motto? That’s what it is like to come into an auto dealer with a pre-approved auto loan, and all you have to do is find your car and you are ready to go.
The trickiest part of my last car buying experience was getting someone to finance me. Being just out of college at the time of my auto purchase, I didn’t have the income right away, and I was trying to get the loan in my own name. Not only would that help build my credit history, but it was going to be one step closer to being an adult, and not having to rely on mom and dad to co-sign for me. I was really looking forward to it, but almost couldn’t get a car due to financing issues.
When you get a pre-approved loan, you typically know for how much the loan is, and what kind of car you are going to get with the money. The banks will typically have different standards for what you can borrow if you are going for a new car, or if you are going to get a used car. If you are going to get a new car, you have the confidence that you already have the money, and you can usually get a good rate because you can shop around.
If you know what kind of loan you have, you also limit the ability of the dealers to try and get you to buy extras that you might not need. If you have a pre-approved loan for 15,000, you know that you can’t go above that limit. If the car already costs you 14,999, you aren’t going to buy the 3,000 dollar extended warranty, or anything else that might push the car above the limit that the loan calls for. It puts you in the drivers seat so to speak.
Like I said earlier, you can shop around for an interest rate before you get to the dealership. Instead of allowing the dealer to pick the bank that is going to finance the deal, you can do that yourself. Instead of going to the bank, you can go to a credit union where you might be able to get an even lower rate than at a bank. You can also determine if you are going to pay back over 48 or 60 months before you even get to the negotiating table too.
Getting a pre-approved auto loan has a lot of upside to it. You already know that you have the money before you go shopping, and you know what the parameters for your search are going to be. The dealer isn’t going to be able to push you past the limit of the deal that you have with the bank, and eliminates the attempt at selling you add-ons. If you can get a pre-approved loan you should, as it saves a lot of time and hassle.