At Pre-Approval Auto Loan, we help you arrange your car loan long before you step onto the dealer lot. In fact, we help the majority of our customers find pre-approval for auto loans within 24 hours. Our secret is twofold. We have coupled our comprehensive portfolio of relationships with trusted auto lenders across the nation with our advanced credit matching system (ACM), which places your secure application with a lender willing to offer you a pre-approved auto loan. Best of all, we are compensated by the lenders themselves, so we transfer no cost to you. Our service is fast, free, and without obligations.
Pre-Approval For Auto Loans: Why So Important?
If you are in the market for a new or used car or truck, best practice dictates that you arrange your loan ahead of time. By showing up at the dealership with your auto loan pre-approved, you give yourself several huge advantages over normal car shoppers:
- You Increase Your Negotiating Leverage
- You Avoid Dealer “Kickbacks” and “Rate-Padding” Practices
- You Make Vehicle Price, Not Financing, The Center of The Discussion
You see, auto loan pre-approval largely removes the dealer from the financing side of the equation. Why is this preferred? Because many dealerships receive “kickbacks” from the auto lenders through whom they get their clients financed. In some cases, they may even engage in “rate-padding,” a practice whereby they offer the borrower a higher annual percentage rate (APR) than quoted by the lender. Guess who gets to keep the extra profit? That’s right: the dealer.
Car Loan Pre-Approval Requirements
When it comes to pre-approval auto loans, there are no hard and fast acceptance criteria. However, we can give you a set of general guidelines taken from a survey of our major auto lending companies. In order to get pre-approved, you typically want to have the following:
- Monthly Income: $1500+
- Employment: 12 Months at Current Employer
- Monthly Debt Payments: Less Than 50% of Income
Typically, an applicant can get pre-approved to finance up to $35,000 of the vehicle’s purchase price. It is preferred that the vehicle be a “late model” if it’s pre-owned. Typically that means a car that’s 5 years old or newer. Again, these guidelines are not set in stone, and you are welcome to apply for pre-approval even if you do not meet them. However, they do serve as a good measure of how ready you and your finances to take on a car loan, and if you meet or exceed these criteria, you will be rewarded with a better chance of pre-approval and lower APR rates.