YOUR FINANCIAL QUESTIONS ANSWERED
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Should I get pre-approved for a car loan before going to a dealership?
Car buyers typically finance their purchase through a dealership or credit union or bank. A pre-approved car loan allows you to borrow up to a certain amount before you start car shopping. Benefits of pre-approval can include:
- Knowing your down payment and maximum monthly payment before going to the dealership.
- Spending less time at the dealership since you know your loan amount and are not relying on the dealer for a loan.
- Negotiating the car price more effectively since you already have a pre-approved amount.
With dealer-arranged financing, the dealer collects information from you and forwards that information to one or more prospective auto lenders. If the lender(s) chooses to finance your loan, they may authorize or quote an interest rate to the dealer to finance the loan, referred to as the “buy rate.” The interest rate that you negotiate with the dealer may be higher than the “buy rate” because it may include an amount that compensates the dealer for handling the financing.
At Education Credit Union, our rates are some of the best in the area with no hidden fees. We can pre-approve your loans, so you can shop like a cash buyer. Learn more about auto loans from Education Credit Union.