Car Loans: Getting Preapproved Can Save You Time   by Paul Winn

in Finance / Loans    (submitted 2011-02-23)

If you're planning on buying a new car, you may want to see about getting preapproved for a loan. A lot of people don't do that. They just go to the dealer and hope that they can get approved. Sometimes they get lucky, with a fast approval and a great interest rate. Other times, they don't do as well. Either they can't get approved, or they end up paying an interest rate that's higher than what they can qualify for elsewhere.

Talk to Your Bank First

If you have an account at a bank or a credit union, talk to them first. Ask about car loans and find out what kind of interest rates they can offer you. You might get something a lot cheaper that way. Many banks and credit unions have great car loan rates that they can offer to their customers. Having good credit and a reasonable down payment can make a world of difference, though.

Check With the Dealer in Advance

When you decide that the car dealer is the best choice, you still may want to get preapproved. Go there in advance and talk to the dealer about your options, or go online and get approved through the finance company that the dealer uses (like Ford Credit, or a Chevy preapproval, for example). That way you won't be walking into the dealer to buy your next car with no idea of the interest rate you'll be offered.

Of course, there are other ways to get preapproved. You can apply to a finance company online that's not affiliated with a major car dealer, or you can check with a buy here/pay here lot – but those rates are generally very high. Preapproval can give you a good idea of what you can afford, though, and will save you time when you go to buy.

About the Author

Paul has been writing about finance for 7 years now. He helps people with research on car loans and other financial products. As with anything Paul recommends you put the time in to know your stuff before deciding.