If you’re searching for a new car, having pre-approval for a car loan could put you in the fast lane and save you a lot of money.
So, what is a pre-approved car loan and how do you get it? Let’s take a look.
Car loan pre-approval is when your lender agrees in principle to lend you a certain amount of money to buy a car, subject to credit approval and an invoice from the dealership.
The main reason to get pre-approved before going to a car dealership is to strengthen your position when negotiating with the dealer. It is difficult to play hardball when you are depending on the dealer for finance! If you know your budget and are buying a car with a pre-approved loan, you can bargain with more confidence.
Depending on where you are in your car buying journey, you can do any or all of the following:
Calculate your repayments - Find out how much you can afford to pay for a car using our car loan calculator. It only takes a minute to get an estimate.
Get car loan pre-approval - complete an online car loan application and then arrange a call with one of our experienced lending managers. They will quickly run through some extra questions and do a credit check. Once an assessment has been made, we will provide a pre-approval. Later, this makes it easier to get approved for a car loan online.
You can get pre-approved for a car loan on the same day, and get final approval within two days. The overall car loan processing time, from application to settlement, takes 3-4 days.
Our minimum loan amount for a private vehicle is $5,000 and our maximum loan is $100,000. For a business vehicle, the minimum is $5,000 and the maximum is $150,000. The amount you can be pre-approved for will depend upon the vehicle purchase price and your financial circumstances.
Pre-approval is a conditional approval based upon the information received at the time of issuance. It is not a guarantee but is an important part in the car loan process. Unconditional approval will be provided once all documentation has been received and a final credit assessment has been conducted.
Helps you set a realistic budget – when you go car shopping, you already know how much you can borrow and what the regular repayment will be.
Get a cheaper interest rate – if you shop around and get pre-approved in advance, you will be able to compare and get the best value finance.
Strengthen your negotiating position – with your pre-approval in hand, you’re in a stronger position to haggle.
Avoid upselling – you can use your pre-approval as an easy way to deflect add-ons and extended warranty offers by saying you are only pre-approved for a lesser amount.
No obligation – there is no obligation to proceed should your circumstances change and there is no out of pocket cost incurred. Only if you proceed to get a loan will you be charged a car loan application fee.
Some things to consider:
Each time you apply for pre-approval a credit check is conducted, so if you get pre-approvals from multiple lenders it can affect your credit score. To avoid this, shop around first and only get pre-approval from your preferred lender.
It is only valid for a limited time.
Once you have been pre-approved the next step is to provide your supporting documentation for the final car loan approval process.
This will include:
A copy of your driver’s license
Once the vehicle has been secured, we will contact the dealership and obtain an invoice for the vehicle.
At that time, a final assessment will be conducted and a final approval granted. You will then receive an electronic copy of your loan contracts to be signed and returned. We will then pay the loan funds to the car dealership directly. You are then free to drive away!
Speak to a lending manager and obtain pre-approval
Provide supporting car loan application documents
Sign a purchase contract for a vehicle with a dealer
We will contact the dealership and obtain an invoice
Final car loan approval will be granted
We issue loan documents and you sign them and return
We will pay the funds to the dealership
You drive away