Shop For a Car Loan before You Shop For a Car

blog-shop-for-your-car-loanShopping for a new vehicle is often quite complicated and overwhelming. Getting pre-approved for a car loan can help to simplify the process and make your life that less stressful. When you shop for a car loan before you shop for a car, you will have all of your finances set up beforehand.  This allows you to spend time focusing on all of the benefits, prices and features of your new auto, instead of just worrying about what type of deal you are getting.

What’s the Point of Getting Approved Beforehand?

Anytime you are able to get approved before the purchase, you are doing yourself a favor. You can easily learn what the lenders are willing to give you, which gives you the power of negotiation. Just because a lender approves you, there isn’t an obligation to use them for your loan. Being approved ahead of time also prevents any surprises down the line. When you get the pre-approval, you will:

  • Know the amount of money you are able to afford spending
  • Shop just like you have cash
  • Understand all of the costs that you are responsible to pay

Getting pre-approved for a new vehicle is one of the best things you can do when shopping for your new ride.

Negotiating on the Price

It seems as if a lot of auto dealers are getting a bad rap these days. Even though there are a lot of good dealerships out there, the bad dealerships are making it more difficult for the good ones. You don’t always know who you are going to wind up dealing with at the lot, which is why a pre-approval can help put you in control of the negotiating process.

Dealers tend to draw your attention to what you are going to spend every month. Once they know what you can afford to pay every month, they can mess around with other components of the purchase. Monthly payments are determined based on the amount of the loan, the length of the loan and the overall interest rate. Once you have agreed to a certain payment amount, they will manipulate all of those ingredients to maximize their profit.

Thanks to your pre-approval, the amount of your monthly payment isn’t any of their concern. You won’t have to worry about a bunch of games. Since you have already worked out the terms with the lender, all the dealer needs to worry about is whether you are offering them a sufficient amount of money for the vehicle.

Eliminating Any Surprises

When you get a pre-approval through someone who is reputable, you will know ahead of time how much you are able to spend. Your finances and credit will already have been reviewed to determine what you are qualified for. Your pre-approval will provide you with the peace of mind you need.

If you aren’t able to get pre-approved, you could wind up dealing with an unpleasant situation. Even though you might think you can get 0 percent financing on a new vehicle, you might not end up getting it when all is said and done. You could spend hours going through all of the different vehicles only to get told that you are in for way more than you bargained for. Since the process of buying a new vehicle can be quite overwhelming, spend time focusing your attention on those things that you know are going to work.

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