Advantages of Applying for Pre-Approval on an Auto Loan

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When it comes to auto loans, there are a few ways that you can apply for an auto loan. 

 

Common ways include applying at the time you purchase your vehicle from a dealership, or applying for pre-approval through a lender ahead of time. Here are a few advantages to applying for pre-approval on an auto loan

A mini car and keys appear on a clipboard as a man in a suit signs a document
Signing on the dotted line at a car dealership can be a quicker or smoother process if you come to the dealership already pre-approved on an auto loan from Camino FCU.

Understand Cars You Can Afford 

When you apply for pre-approval on an auto loan through a financial lender, if you are approved, you will be approved for an auto loan up to a certain dollar amount. This price range will help you understand how much you can afford to pay for a new or used vehicle, and guide your vehicle search from there. 

 

Get the Best Possible Interest Rate

If you wait until you get to the dealership to discuss a loan with your car salesman you may face an interest rate mark-up and be likely to accept the dealership’s high rate offer under pressure to ensure that you go home with the vehicle you  want. 

 

However, avoiding this situation can be simple. If you were to apply for pre-approval on an auto loan, you would know prior to stepping foot in the dealership what interest rate you will have on that auto loan. As you apply for auto loan pre-approval, you can also shop around and compare rates from different lenders. 

 

Leverage More Negotiating Power 

When you’ve already been pre-approved for a car loan prior to walking into a car dealership, you’re more like a cash buyer in the sense that you know what you can afford and won’t be depending on haggling for a good vehicle and auto loan price with a car salesman. 

 

This gives you an  advantage when negotiating a final price on your vehicle and can also help you to avoid high pressure upsells. The dealership salesmen know that when you come to their dealership with pre-approval on an auto loan that you have the freedom to go to any dealer you choose and can check out several different dealers to shop around for the best vehicle price. The salesmen know this and may be more open to negotiating a better price with you. 

 

Simplify the Car Buying Experience

Buying a vehicle can be a  large investment and can be stressful. When you have a pre-approval on an auto loan, you already have one major step of the car buying experience taken care of before even visiting the dealership. You know what amount of an auto loan you’re approved for, you know you have the best interest rate, and you’re set up to leverage maximum negotiation power. 

 

If you choose to apply for pre-approval on an auto loan, remember that pre-approvals are only valid for a limited time period. If you haven’t purchased the vehicle by the time your pre-approval expires, you will need to reapply. 

 

If you’re ready to get the upper hand before you head to the dealership, apply for pre-approval on an auto loan with Camino Federal Credit Union today.

 

Do you need help financing your car? Let us know!

 

Let Camino help you. We want our members to find options that work for their needs. We offer competitive auto loan rates. Please go online at caminofcu.org, give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us for more information.