When buying a car, ideally you’d pay cash for the vehicle in order to negotiate aggressively on price and avoid monthly payments and interest charges.
In reality, few of us can do that, so finding the right financing becomes important.
If approved, advantages include knowing the terms of your loan before walking into the dealership, and an empowered, streamlined car-buying process where you can focus on negotiating vehicle price like a cash buyer, loan voucher in hand.
How preapproved auto loans may improve the car-buying experience
Let’s look at the potential advantages a little further.
Finding competitive financing
Take the opportunity to shop around with different lenders to find the best financing for your situation. Comparing the terms might 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 before arriving at a dealership. These will include key points like the loan amount, interest rate and the duration of the loan, and may help you stay within budget as you shop for a car.
Enjoying 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 there is one, without the distraction of having to negotiate the 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. “Because you have preapproved loan offers in your pocket, you get to choose whether to stick with one of them, or negotiate with the dealer for the best financing option,” says the Consumer Financial Protection Bureau.
A simple car-buying process
All of this may save you time at the dealership and add up to a stress-free car-buying experience.
Finding preapproval with bad credit*
The advertised interest rates you’ll see on websites are usually for those 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, consider RoadLoans, an online, direct-to-consumer lender 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.Written by: