Being pre-approved for an auto loan before going to the dealer can provide several benefits, including:
Knowing your budget: When you are pre-approved for an auto loan, you will know exactly how much money you can borrow from the lender, which will help you determine your budget for the vehicle you want to buy. This will allow you to focus on cars that are within your budget and avoid wasting time looking at cars that are out of your price range.
Negotiating power: Being pre-approved for an auto loan can give you more negotiating power when you are at the dealership. You can use your pre-approval as leverage to negotiate a better interest rate or a lower price on the car.
Avoiding dealership financing: Dealerships often make money by financing your car purchase at a higher interest rate than you could get elsewhere. When you are pre-approved for an auto loan, you can avoid dealership financing altogether and choose a lender that offers you a lower interest rate.
Saving time: When you are pre-approved for an auto loan, you can skip the step of getting financing at the dealership, which can save you time during the car-buying process. You can focus on finding the car you want and finalize the purchase without worrying about financing.
In summary, being pre-approved for an auto loan can give you a clear budget, negotiating power, and the ability to avoid dealership financing, saving you both time and money during the car-buying process.