Auto loan pre-approvals have benefits

It’s easy to visit a car dealership and start negotiating for your dream car. But if you don’t have enough money down, the dealership will hold all the cards at the bargaining table. Getting pre-approved by a financial institution, however, puts you in charge of the negotiations if both sides can’t agree on the price of the vehicle.

Here are three reasons for having an auto loan pre-approval:

Secured rate

By going into the dealership with a pre-approved loan with a set interest rate, you’re telling the dealership you’ve done your homework. If the dealership wants you to go with an in-house loan, it will either have to match or beat your interest rate if it wants your business. In some cases, dealerships are able to do so but if they can’t, you know where to go for your loan.

Secured amount

The dealership can’t entice you to buy a vehicle out of your price range if you already know what your maximum limit is and how it affects your budget. If your pre-approval amount is $30,000, you should shop for a car in the $20,000 to $25,000 range. That’s because you’ll also have to consider taxes, title, registration, insurance and other possible fees that will be tacked on to the final price.

Flexibility of going anywhere

This is easy enough. If a dealership won’t work with you over financing or refuses to meet your final price, just leave. Visit another dealership that will work with you. Keep in mind dealerships must make a profit, so it may be wise not to lowball them to the point they ask you to take your business elsewhere.

Ready to buy a new car? Get pre-approved with Travis Credit Union today! Visit our Auto Loans for more information.

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