Shopping for a used or a new car may be an impending adventure waiting to happen. However, when it comes to financing the purchase, it can be a tedious job, especially when it comes to arranging the auto loan. So how do you keep a minimum time in your lender’s presence? The easiest way to do so is through the pre – qualification of the car loan.
Given below are some of the benefits of the pre – qualifying for a car loan which makes it the best car loan you should take advantage of:
Get better interest rates: While dealer financing is convenient, you will always be a risk for car loan rates that have been marked up. This means, that you are more liable to pay 1to 2% more than the current market rate. While this may seem like a small figure, in the long run, you may end up paying more than usual. By getting a pre – approved loan, you know you will get the best of the loan rates you can qualify for. Additionally, you will also be able to judge whether the dealer is offering you a good deal or not.
Set a realistic budget: One of the main drawbacks of a car purchase is the budget. When it comes to purchasing a car, you may have a fixed value in mind. But many a time, your dealer may convince you to opt for additional features, such as add – on or insurance, which can increase your overall loan amount. One getting a pre – approved loan amount, you get not only a fixed interest rate but also a realistic budget. You can even take into consideration other loan factors such as the add-ons, insurance, down payment, trade-in amounts amongst other expenditures to know what your budget will be like.
Simplify your dealership experience: A dealership experience can be a pleasant, exhausting or discouraging one. But a simple factor, such as a pre – qualified loan will make a considerable difference in your dealership experience. In other words, a pre – approved loan will be the best car loan you can use to finance your car purchase. For one, it makes your dealership experience simple and convenient. This is because, a dealer will see you as a buyer with cash in hand, and someone who can easily walk away from negotiations at any time. In other words, they do not have fixed rates that can be turned in their favour and against yours.
Negotiate more effectually: When you bring a pre – approved car loan, you can always ask the dealer to beat your interest rate. Very often, dealers have access to cheaper financing through captive lenders. These are banks that are set up by car dealership companies just so that they can produce auto loans. It will work in your favour if you fill out a loan application at the dealership to see what special deals and incentive you are viable for, especially if you have a strong credit.