If you want to buy the car of your dreams, you can save a lot of time and money by obtaining finance for your vehicle first. It really does not matter if you are a first-time buyer or vehicle owner who has gone through this process many times before, a pre-approved auto loan automatically places you in the driver’s seat. Here are 3 reasons why.
1. It tells the salesperson you have done your Homework
When you walk onto the showroom floor of a car dealership with a pre-approved loan, the salesperson will know that you have done your homework in advance. Therefore, it makes it very difficult for the dealership to exploit you by sending you to their finance man for a deal that you really do not want. In fact, you have just skipped the most critical part of the process and you can simply point to the vehicle that you want to purchase, negotiate a price that you want to pay, give them the pre-approval letter and then drive off with your new vehicle.
2. You Strengthen Your Position by Simplifying the Negotiations
Buying a new car requires certain skills and knowledge to be good at getting the best deals. Car dealerships are already equipped with professionals that do this every day. Therefore, the negotiation game is automatically set in their favor and you may find it difficult to beat unless you have your own established strategy. With a pre-approved loan, you can walk on the lot with the figure that they need to meet or do better. If they really want to sell the car to you to meet their sales quota, this game is now in your favor.
3. Your Dealer has to Beat the Rates of the Pre-Approved Loan
By walking on the lot with cash in hand (pre-approved loan), you place the car dealership in the position of negotiating for your business. The pre-approved loan that you have in your hand is the bargaining power to pay for your vehicle. The loan officer will not only be forced to beat the interest rate that your financier has given you but also has to sweeten the deal by lowering the price on your vehicle.
If you are like most people, buying a new vehicle is a major purchase that will affect the monthly amount of money that you will have remaining to pay your other monthly bills. Therefore, the decisions you make when you purchase your new car can make a big difference in your budget for a long period of time. By getting your loan pre-approved before you visit a dealer, you can take advantage of several different benefits, including negotiating the best deal for your dream car.