Should I Get Pre-Approved for a Car Loan?
You’ve done your research, visited countless dealerships, and managed to find the car of your dreams. Now, there’s just one thing left to do: figure out how you’re going to finance your new vehicle. Unless you’re planning to pay for it all at once, you’ll need to secure a loan from a bank, credit union, online lender, or dealership of your choice.
As you begin to weigh your options when it comes to financing, you may find yourself wondering, “Should I get pre-approved for a car loan?” There are several advantages to getting pre-approved, including lower interest rates, more negotiating power, convenience, and more. Let’s take a closer look at how taking the extra time to get pre-approved before buying a car can set you up for success.
4 Reasons to Get Pre-Approved Before Buying a Car
1. Set a Clear Budget
Albeit exciting, purchasing a new car can also be stressful — especially as you start trying to figure out how much car you can actually afford. Getting pre-approved can help take away some of the stress, as you’ll know exactly how much money you can borrow, what your monthly payments will be, and the length of your loan term. Knowing all of this can help you plan and set a clear, realistic budget before you even step foot on the lot. This will also help you avoid overspending and ending up with monthly car payments that you can’t afford.
Related: A Step-by-Step Guide to Financing Your Next Car
2. Get Better Interest Rates
Shopping for a new car is about more than just getting the lowest purchase price — you’ll also want to get the best interest rate possible. Interest accumulates over time, and if you have a high rate and long loan term, you’ll end up paying more for your car than you originally planned. Although it might not seem like a big deal, an annual percentage rate (APR) that is just one to two percent higher can increase your total payment by hundreds, or even thousands, of dollars. Getting pre-approved for a car loan can help you get better interest rates, which will help you save money in the long run.
3. Strengthen Your Negotiating Power
In addition to showing dealers that you’ve come prepared and done your homework, getting pre-approved for a car loan also strengthens your negotiating power. When you show up to a dealership with a loan, the dealer has two choices: accept your loan or counter it with a better offer. Without taking the time to get pre-approved, you might be more inclined to take whatever financing is presented to you. However, already having a loan puts you in control and gives you the power to negotiate. You can either keep the loan you already have or potentially receive an even better offer from the dealership — either way, the choice is yours!
4. Save Time
Your time is valuable — and as much fun as car buying can be, you probably want to get it done as fast as possible. However, between actually looking for a car and negotiating your financing options, purchasing a vehicle can quickly become an all-day ordeal. Getting pre-approved allows you to skip a majority of the negotiations about financing, helping you save time and get on the road sooner. You already have a loan and know exactly how much car you can afford — all you have to do is focus on finding the vehicle of your dreams!
Financing Your Next Car at Burlington Kia
Still wondering, “Should I get pre-approved for a car loan?” While you can get pre-approved for a loan at a bank or credit union, we make it easy by offering an online application. Simply answer some questions about yourself and provide detailed information about your finances and you’ll be on your way to getting pre-approved.
When you buy a vehicle from Burlington Kia, our finance professionals will be here to answer your questions and guide you through the entire process from start to finish. Take advantage of our dealership’s finance center, as well as our experienced team of dealers, and get one step closer to driving away in a new car.