When buying a car, ideally you’d pay cash for the vehicle in order to negotiate strongly on price and avoid monthly payments and interest charges. In reality, few of us can do that, so finding the right financing becomes important.
But what is the right financing? Preapproved auto loans, recommended by the Consumer Financial Protection Bureau, are a good option in a number of ways, and you can apply with a range of lenders such as banks, credit unions, finance companies and online lenders.
If approved, advantages include knowing the terms of your loan and how much you can spend before walking into the dealership so that, even with financing, you can negotiate a vehicle’s price with the confidence of a cash buyer.
How preapproved auto loans improve the car-buying experience
Let’s look at the potential advantages a little further.
Competitive financing – Take the opportunity to shop around to find the best financing deal, and the best lender, for your situation. Comparing loan terms may save you money on the total cost of buying a car.
Knowing before going – If approved, you’ll know the exact terms of your auto loan – including loan amount, monthly payment, interest rate and loan duration – up front, all of which can help you stay within your car-buying budget.
Enjoy a strong negotiating position – Having a preapproved auto loan voucher enables you to concentrate on negotiating a good price for your chosen vehicle and trade-in, if you have one, without the distraction of having to arrange financing as well. If the dealer offers you financing, you’ll be able to compare the terms to those for which you are already approved, and go with the best offer.
A simple car-buying process – All of this may save you time at the dealership and add up to a smooth, stress-free experience.
Preapproval with bad credit*
The advertised interest rates you see on websites are usually for shoppers with the best credit but, if you have bad credit, there may still be options. The rates might be higher, but at least you’ll know what you can afford.
When shopping for financing, take a few minutes to apply with RoadLoans, the online, direct-lending platform of Santander Consumer USA, that accepts applications from people with all types of credit.
Here’s what one RoadLoans customer, Benjamin M., had to say about his preapproval experience:
“I have bad credit, so I didn’t think I would be able to get a new car. Well, after a short application, I clicked apply now and within a few minutes I had a preapproval printed and in my hand.
“I drove to several dealerships and really shopped around. It felt good to already have my financing in hand, and the dealerships were much more eager to help me because of it. Overall I was able to set my own terms, pick the vehicle that I wanted and drive off in a beautiful car with very little money down!”
If you’re looking for a preapproved car loan, apply online with RoadLoans to get an instant decision.
* “Bad” or “Poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press), Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by RoadLoans.com and Santander Consumer USA.