Ideally, you would pay for your car with cash. That way, you wouldn’t have to deal with loans, payments, or debt. Realistically speaking, however, that is an impossibility for most of us.
In order to get the car you need for school, family, or work, you will most likely have to finance. Luckily, there are easy ways to get pre-approved for a car loan, which usually carries a much lower interest rate than a personal loan.
How to Get Pre-Approved for a Car Loan
There are many places that you can go to get pre-approved for a car loan, including traditional banking institutions, such as Wells Fargo and Bank of America, and online lenders, such as Capital One. Interest rates and requirements vary by location.
Keep in mind that the advertised interest rates on websites and advertisements tend to be reserved for those with excellent credit. If you have bad credit or no credit, it’s still possible to find a car you love at a price you can afford. Rates will be higher, but there are options available, such as getting a cosigner to lower your rates.
While it’s a good idea to shop around, we highly recommend checking with your dealership first before seeking out competitors.
At Auto Simple, you can easily get pre-approved online. Just fill out the form and you’ll get your pre-approval within minutes. Don’t worry, it won’t affect your credit score.
Good Credit? Accepted
Bad Credit? Accepted
No Credit? Accepted
Past Bankruptcy? Accepted
Once you get approved, you will know how much you can spend on a vehicle along with the interest rate and monthly payments for the loan.
If you don’t know what your credit score is, it’s a good idea to check before seeking out auto loans. Check with your bank. You are normally entitled to one free credit report per year.
Important Note: When you get pre-approved for a car loan, it’s almost always required that you purchase your vehicle from an authorized dealership. Most pre-approved auto loans don’t apply to independent dealerships and private sellers. If you wanted to purchase a vehicle from a private seller or independent dealership, you would have to take out a personal loan, which carries higher interest rates.
Benefits of Pre-Approved Auto Loans
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Helps set a realistic budget
When you get an auto loan pre-approval, your lender will set a maximum loan amount based on your credit score and other factors. Don’t forget about other expenses, such as fees and taxes. So if you are approved for a $20,000 loan, choose a car that is several thousands of dollars less than that.
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Improves your credit score
When you make regular payments on your auto loan, you can quickly rebuild your credit score. Our goal at Auto Simple is to approve your financing and help rebuild your credit by reporting to 3 major credit reporting agencies every month.
We want to work with you. If you need to speak with us about your loan or payments, simply give us a call and we’ll figure something out together so as not to harm your credit.
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Allows you to compare interest rates
Auto loan pre-approvals provide a baseline to compare with other offers. Simply fill out your dealer’s pre-approval application first to see what is being offered.
Many dealerships offer competitive financing to simplify the payment process and get customers to finance with them.
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Simplify the buying process
When you are pre-approved, you not only have a realistic budget in place, it’s also like having cash in your pocket when you are shopping around for the best car deal. Once you are pre-approved, you can focus on the car-buying process rather than worry about down payments, loan terms, and interest rates. Simply ask your dealer what the “out-of-door” or “TT&L” (tax, title and license) price is.
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Avoid spot delivery and “yo-yo financing” scams
Sometimes, dealerships will allow you to leave the lot with your new car without fully closing out the financing portion of the deal. This is what is known as “spot delivery”—cars are sold “on-the-spot.”
Yo-yo financing usually happens to people with poor credit when the deal is made on late nights or weekends, when banks are closed. When the banks open, they review the loan applications and either approve or deny them.
If you left the lot without the bank approving the loan first, you may receive a call from the dealership notifying you that the loan wasn’t approved. This may entail going back to the dealership to reapply for the loan, which normally leads to higher interest rates and a larger down payment.
Subprime buyers (those with a credit rating under 680) are particularly susceptible to dealership scams. You can avoid this situation entirely by getting pre-approved for a loan.
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Save time, energy, and money
Pre-approved loans save you a lot of time and energy at finance and insurance (F&I) offices, where you will most likely have to sit through several sales pitches. Buying a car is complicated enough without adding a lot of paperwork and travel time to different offices.
Why Choose Auto Simple
Our goal is to provide everyone with the right car, regardless of credit history. With hundreds of cars, trucks, vans, and SUVs, we make it easy to drive away in the car that matches your lifestyle and budget.
- Free CarFax on all vehicles
- Hassle-free financing
- Easy, fast process (drive away in less than an hour)
- Free conventional oil changes every 90 days
- Rebuild your credit (we report to major credit reporting agencies every month)
Final Note:
To avoid going deeper into debt and possibly getting your vehicle repossessed, do your homework first and make sure you can actually make your car payments. While auto loan pre-approvals can quickly rebuild your credit score, they can also make it worse. Learn how to buy a used car if you have bad or no credit.
Read our Used Car Buyer’s Guide for more information on the car-buying process.
For a dealership that knows how to treat buyers right, contact Auto Simple.
We carry a large selection of hand-picked, Certified Pre-Owned vehicles, all of which come with a 6 month/6,000-mile powertrain warranty.
If you have any questions, don’t hesitate to speak with one of our Online Specialists or give us a call:
Chattanooga, TN – (423) 551-3600
Cleveland, TN – (423) 472-2000
Dayton, TN – (423) 775-4600
Dalton, GA – (706) 217-2277
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