The excitement of a test drive can give you tunnel vision. Previous concerns about good rates, solid loan terms and a sensible vehicle may disappear after a ride in your dream car, but finding the perfect car for you and your finances is easy when you start by getting pre-approved for an auto loan. Here is how a pre-approval gives you an advantage over dealer financing.
You know how much you can afford. Decide what vehicles you want to look at and how much you can afford. The best way to figure it out is to get pre-approved for an auto loan before you hit the dealership. Once you're pre-approved, you'll know your interest rate, the length of your loan and the amount you're approved for, so you can estimate your monthly payment and determine the purchase price range you can afford.
You may get lower rates. Getting pre-approved from a trusted financial institution may enable you to qualify for lower interest rates on your loan. Bringing your own financing into the deal means you have the upper hand. Your dealer can still try to offer you financing, but if the rates or terms aren't as desirable, you already have secured financing.
You can shop like a cash buyer. Getting pre-approved gives you many of the same perks as a cash buyer, including increased power for negotiations. Since there is no need to negotiate interest rates, down payments or loan terms, you can focus on getting the best price possible for your vehicle. And, because you already know what you can afford, you don't risk getting caught up in the excitement of buying a new car with payments you can't manage.
How a Pre-approval Works
Getting pre-approved for an auto loan is simple, and when you use your financial institution, you're working with people you know and trust. Here is what you need:
- Trade-in information, if any
- Amount you expect to finance (be sure to include vehicle price, taxes, tags, title and warranty, less any down payment)
- Length (term) of the loan you want
- If you've already decided on the vehicle you want to purchase, you'll need to know its vehicle identification number (VIN), the exact mileage, the state in which it will be registered and the dealer or seller's name.
Before you go car buying, apply online for a low-rate Navy Federal auto loan or call 1-888-842-6328. With a Navy Federal pre-approved auto loan, you’ll be better prepared to drive away in your new car!