Many consumers wonder why financial advisors recommend that they get auto loan preapproval before they start shopping for a vehicle. This is a good question, but one that’s easily explained.
There are some things that go together: love and marriage, salt and pepper, burgers and fries, Mork and Mindy. Another one is cars and financing. The reality is, whether you buy a new or used car, truck, van or SUV, chances are pretty good that you’ll end up financing it. New cars are getting more and more expensive. Which is one reason that it is recommended you get auto loan preapproval before you start looking for a car.
It’s simple. How can you shop for something if you don’t know whether you can buy it? Credit worthiness varies substantially from person to person. So if you go in and pick out a vehicle that you want to buy, and you haven’t gone through the process of auto loan preapproval, how do you know whether you’ll be able to afford the car or truck you’ve already falling in love with? Do you know for sure whether any finance companies will lend you the money to buy it?
The solution is to just line up your financing before you start the process. Plan ahead and take your time. You might check with your local bank or credit union to see whether they might have a program that works for you and your particular credit situation. Or you might contact one of the e-loan providers on the web to see if you can get auto loan preapproval there. The benefit to an e-loan company is that they can generally finance customers in lots of states, and they usually have an online application form that will allow you to get approval without even leaving your house.
Once you have your pre approval paper work in hand, you can go find the car of your dreams. It’s really that simple. And the best part is, when you walk on a dealership’s lot you can do so knowing that you don’t have to play any games with down payments and interest rates and monthly amounts. That part is already handled, so you are in a position of power as you begin to come up with a fair price for the vehicle you want.
So remember, you won’t know what you can afford until you know whether you’re approved. Getting auto loan preapproval is a great idea no matter what kind of vehicle you’re going to buy.Written by: