Getting preapproved for an auto loan before you walk into a dealership helps put you in the driver’s seat during the car-buying process.
Before you even step foot in a dealership, you already know what most people stress out about: your down payment and your maximum monthly payment. Because your auto loan preapproval is set, you know pretty well how much you’ll pay and when, as long as you stick at or below your preapproval amount.
Dealers like to convince you to buy add-ons, such as extended warranty, GAP insurance, appearance packages and the like. If the salesperson tries to sell you things other than a car — or upgrade you to a more expensive car — you can feel more confident declining the offer because you know how much you can comfortably spend.
A LOWER RATE
Getting preapproved is often the best option when you’re trying to finance a car because it can help you get a lower interest rate on your loan. You know the auto loan rate you deserve without the dealership acting as a middleman and upping your APR.
LESS TIME AT THE DEALER
You can cut to the chase when you know what car you’re looking for and at what price, and you aren’t relying on the dealer to find a loan for you. You spend less time negotiating and less time overall when you have a car preapproval.
When you have a preapproval from a lender, rather than an offer through a dealer, you may be able to go to almost any dealer. This helps you negotiate the price of the car more effectively because you easily can take your business elsewhere if your requirements are not met.