Car Loan Pre Approval
| Car Loan Pre Approval |
Car dealers can make a great deal of "Back-End" profit when the customer finances their new car at the dealership. They have many banks they can use to find an interest rate that will fit their negotiation strategy.
It is important for a customer to secure their own financing before they visit the dealer. This will give the customer a “base-line” rate that they can use if the dealer’s rate is too high.
Being pre-approved will provide the customer with an effective negotiation tool. Because the customer is prepared with a “locked in” rate, the dealership must at least match or improve upon that rate.
Keep in mind, a car dealer can not require the customer to use the dealer’s financing. For example, the dealership can not agree on a sales price and then make it contingent on the customer using dealer’s financing.
If a customer wants to be truly prepared to negotiate they must be pre-approved.
Also, if the customer has less than perfect credit, being pre-approved will allow them to negotiate from a stronger position and enable them to forecast an accurate budget and price range for their next car.
To get pre-approved a customer can go to their bank where they have their checking and saving accounts. However, one of the best places for customers to find competitive interest rates can be credit unions. Credit Union rates are sometimes better than tradition “brick and mortar” banks because many are not tied the Fed’s short Term interest rate. Also, you can get pre-approved by submitting your information to a secure lending site here.
Most credit unions will require the customer to activate a savings or checking account; still these minimum requirements may provide the customer with a better savings in the long run.
Plus, many credit unions are members of the “CUDL” network, which will allow their members to sign the loan documents at the dealership. To find a “CUDL” credit union, go to: www.cudlautosmart.com's credit union locator .
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