Before you even begin your shopping for a new car, you should set aside some time for a prequalify auto loan. The thing is when you have that blank check from your lender showing that you are already approved for a car loan, they instantly see you as a cash buyer. And you will notice immediately how different they begin treating you – all of a sudden, you find yourself in a stronger position from which to negotiate.
Even better news for you is that it is actually much easier to get preapproved for an auto loans than you think. And with many lenders, it doesn’t even matter if you have bad credit.
Getting a Competitive Car Loan Interest Rate
While you can’t help but love the convenience of car financing at the dealership, you will find that often times they do not offer the best auto loan terms. Many of these 0% financing ads you see on TV has some fine print – which means only about one person in 100,000 ever qualifies for any of those. And when you sit down and find out what interest rates they will give you for a normal car loan, you will see that they are usually 1-2% higher than traditional prime lenders.
So when you get yourself a prequalify auto loan, than you know that you would have gotten the best car loan terms.
Set Yourself a Sensible Budget
Whenever you have gotten yourself approved for a car loan amount at certain interest rates, you are now able to adjust your personal budget to reflect this new payment amount. You can now determine how your car insurance premiums will change. And you can figure what your registration fee for your new car will be ahead of time.
Now you know many other things too. For instance, you now know how much down payment you will be able to put together for your loan. You know how much more (or less) money you will have available in your new monthly budget.
Think for a minute how things have been with traditional car loans. Most of the time, you really have no clue until the last minute what your new monthly expenses will be. Thus, you have zero ability to plan anything before hand – you can only estimate.
Simplifies your Visit to the Dealership
Your car shopping get much easier – because as we said earlier – they see you as a cash buyer. This means they take your much more seriously because your loan is not going to be shot down. And more importantly, they know you can easily go to the next car lot if you choose. This means their objective is to make a deal with you today – no matter what.
And this is a beautiful thing for a car buyer – having them kiss your ass for a change, rather than tearing down your trade-in or laugh at your offers. This is the beauty of having a prequalify auto loan.
Negotiate Much More Favorably
One last thing to think about when you take your preapproved blank check into the car dealer concerns interest rates. Ask them if they can beat the interest rate of your preapproved car loan. Sometimes these dealerships have access to lower interest rates through their captive lenders – which are banks who have been set up exclusively for making car loans.