{"id":4789,"date":"2018-09-05T19:56:59","date_gmt":"2018-09-06T02:56:59","guid":{"rendered":"http:\/\/localhost\/lendingarch\/?p=137"},"modified":"2018-09-05T19:56:59","modified_gmt":"2018-09-06T02:56:59","slug":"benefits-pre-approved-for-car-loan","status":"publish","type":"post","link":"https:\/\/bestlendersfor.ca\/benefits-pre-approved-for-car-loan\/","title":{"rendered":"4 Benefits of Getting Pre-Approved for a Car Loan"},"content":{"rendered":"

Buying a car is stressful. That\u2019s because it\u2019s one of the most expensive purchases you\u2019ll ever make and there are thousands of cars to choose from.<\/p>\n

But here\u2019s the good news: buying a car doesn\u2019t have to cause high anxiety. While it may seem counterintuitive, taking a few minutes to\u00a0get pre-approved for a car loan\u00a0<\/a>will help make the car buying process seamless.<\/p>\n

Let\u2019s back up for a minute: getting pre-approved for a car loan is not the same as actually signing on the dotted line for that loan.<\/p>\n

Pre-approval is a preliminary evaluation of a potential borrower that determines the maximum loan amount and estimated interest rate. However, getting pre-approved does bring you one step closer to securing\u00a0the best loan to purchase a car<\/a>\u00a0– prior to ever stepping foot in a dealership.<\/p>\n

Still not convinced that getting pre-approved in the right move?<\/p>\n

Here are 4 reasons why<\/strong>\u00a0it\u2019s always a smart idea to get pre-approved for a car loan.<\/p>\n

1. Your future self will thank you<\/h2>\n

There are a lot of fun decisions to make when it comes to buying a car, including the make, model, color and upgrades. But, whether you like it or not, most of these factors are determined by what you can afford.<\/p>\n

Figuring out the financial details of car ownership isn\u2019t the most exciting part of the process, and this is why it\u2019s important to do this ahead of time. By dealing with the unpleasant or stressful aspects of buying a car first, you\u2019ll be able to enjoy the car-buying process even more.<\/p>\n

This is sometimes called front-loading. And, as it turns out,\u00a0front-loading unpleasant tasks can help alleviate stress<\/a>. While the concept of \u201cfront-loading<\/strong>\u201d is usually reserved for work related tasks, it can certainly be adapted to personal finance tasks as well. For example, perhaps you want to save for retirement in your 30s.<\/p>\n

To free up funds, you decide to front-load by paying off your loans first. This way you\u2019ll pay off all your debts as soon as possible, allowing you to focus on saving for your retirement.<\/p>\n

Now, let\u2019s adapt this to the car buying process. When it comes to car shopping, you can front-load and reduce your stress by getting pre-approved for a car loan. This will help you figure out expected payment terms, the interest rate, and how these payments will fit into your monthly budget.<\/p>\n

It\u2019s never fun to worry about money, but the sooner you handle the finances of your car loan with pre-approval, the less you\u2019ll have to worry about later on. It\u2019s a win-win.<\/p>\n

Get Approved Today!<\/a><\/p>\n

2. You\u2019ll get a better deal<\/h2>\n

When it comes to buying a car, there are two primary financial factors you\u2019ll want to consider: the terms of your loan and the price of the car.<\/p>\n

Most people only focus on the price of the car and get swept up when they hear about low monthly payments or other special offers at the dealership.<\/p>\n

While you may love getting a good deal on the car itself, this is only half of the equation.You also have to factor in how much you\u2019ll be paying each month. Here\u2019s how your monthly payment is calculated:<\/p>\n

Principal:\u00a0<\/strong>This is the total cost of the car and includes everything\u2014fees, vehicle cost, upgrades and taxes.<\/p>\n

Term:\u00a0<\/strong>This is the length of your car loan. The shorter the term, the less interest you\u2019ll pay.<\/p>\n

Interest Rate:\u00a0<\/strong>This is a percentage that is charged by the lender. Interest rates are determined based on a variety of factors and are calculated separately for each applicant.<\/p>\n

Here\u2019s the deal. Most car buyers only focus on the principal, or the total cost of the car. But the loan term and interest rate are just as important, and that\u2019s why it\u2019s a great idea to get pre-approved.<\/p>\n

Getting pre-approved for a car loan<\/a>\u00a0means that you will already know the term of the loan and the interest rate before visiting a dealership. Because of this, you\u2019ll be empowered to get a better deal on the car.<\/p>\n

Remember: it\u2019s easy to fall in love with a car and worry about the details later. But here\u2019s the truth: knowing the details of your finances and shopping accordingly will enable you to get a better deal.<\/p>\n

3. You\u2019ll stick to your budget<\/h2>\n

You walk into the dealership and there\u2019s a beautiful car on display. It\u2019s brand new and boasts leather seats, the latest technology and amazing upgrades you never even knew existed.<\/p>\n

A friendly sales representative sees you staring at the car and walks over to greet you. The next hour is a blur as you test drive the car and learn more about the features. By the time you sit down to discuss the price, it\u2019s already too late\u2014you\u2019ve fallen in love with a car you can\u2019t really afford.<\/p>\n

Here\u2019s the real deal: if you\u2019ve ever been caught up in the moment at a car dealership, you\u2019re not alone<\/strong>.<\/p>\n

Canadians are increasingly purchasing\u00a0more car than they can afford<\/a>. But you\u2019ll pay for more than the cost of the car if you get swept up in the moment\u2014you\u2019ll also increase your financial stress.<\/p>\n

Getting pre-approved for a car loan, in turn, will help you avoid getting carried away. Why? Because you\u2019ll walk into the dealership with a budget, which will help you worry less and live within your means.<\/p>\n

Knowing what you can afford to spend and then sticking to it is actually one of the most effective ways to reduce stress throughout the car buying process.<\/p>\n

Indeed, a pre-approval means that you\u2019ll know your maximum loan amount and estimated interest rate before you start shopping. This is a surefire way to avoid buying a car you can\u2019t afford.<\/p>\n

Get Pre-Approved Now<\/a><\/p>\n

4. You\u2019ll negotiate better<\/h2>\n

If you\u2019ve ever tried to negotiate, you probably remember how awkward it was. Asking for more or demanding less often feels uncomfortable, especially if you have to do it in person.<\/p>\n

This is when a car loan pre-approval comes in handy. You\u2019ll be in a stronger position to negotiate at the dealership because your budget and terms are already set. In other words, negotiating will feel significantly less awkward because it will be based on your loan pre-approval terms and not on your personal desire to save money (although there\u2019s definitely nothing wrong with that either!).<\/p>\n

Still feeling weird about negotiation? Here are some ways to use your car loan pre-approval to your advantage.<\/p>\n