You’ve probably heard that when you go car shopping, you should consider getting pre-approved for an auto loan—but why is that?

Simply put, getting pre-approved puts you in the driver’s seat and gives you more leverage when shopping for a car.

Getting pre-approved can be easy if you know the right steps. So, here’s what you need to know about buying a car with a pre-approved loan.

What Is a Pre-Approved Car Loan?

A car loan pre-approval means that a lender has evaluated your credit report, employment history, and other factors to determine what your loan amount should be—but it’s not the actual loan itself.

Many people make the mistake of applying for a loan after deciding which car they want to buy. This can lead to being denied financing after spending hours at a dealership enduring endless paperwork. A pre-approved loan helps you avoid this and makes the process easier and more convenient for you.

The Benefits of Buying a Car With a Pre-Approved Loan

Below are just a few benefits of buying a car with a pre-approved loan.

Sets a Price for Your Budget

Since you’ll know beforehand what you can borrow and what the interest rate will be, buying a car with a pre-approved loan helps you set a realistic budget.

But, just because you’re pre-approved for your loan amount doesn’t mean you should simply buy any car with your base price. Be aware of additional expenses such as taxes and potential fees. Also, a down payment or trade-in contribution will work in your favor to lower the total cost.

Using this information, estimate your monthly auto payment using a loan calculator—but remember to factor in additional costs like car insurance, gas, and regular maintenance as well.

Gives You Financial Markup Protection

Dealers work with various lenders who have predetermined rates for specific financial profiles.

But, they can tack on as much as 1-2 additional percentage points to your rate. By getting pre-approved, you’ll know that you’ve received the best interest rate you qualify for. With this knowledge, you can judge whether or not your dealer is giving you a good package.

Puts You in a Strong Negotiating Position

With your lender-approved blank check or certificate, you’re now a “cash buyer” and in a far stronger negotiating position than you were without one. Therefore, buying a car with a pre-approved loan gives you a major advantage!

Steps to Getting a Pre-Approved Loan

Applying is easy at Pacific NW Federal Credit Union.

First, you must be a member of Pacific NW Federal Credit Union. Next, fill out our online pre-approval application, which includes:

• Information about the specific loan you want
• Collateral information (where applicable)
• Details about you and your co-borrower (if you have one)

After receiving the application, we’ll review it along with your credit history and any debt you may be carrying.

Once you have a pre-approval letter in hand, you can start browsing vehicles that fit your budget. Whether you’re interested in purchasing a brand new vehicle or driving away in a road-tested used car, we can also help you find the perfect car with our AutoSmart auto resource center.

Why Pick Pacific NW FCU as Your Lender

We know you work hard for your money. So you should be able to trust the people handling your financial future. At Pacific NW Federal Credit Union, we’re invested in your financial success. One way we do this is by offering you low fees and excellent interest rates. If you’re ready to buy a car with a pre-approved loan, click the link below to get started!

See Our Auto Loans