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Pre-approved car loan comparison
Pre-approved car finance puts you in the driver's seat when looking for a car loan.
If you’re looking for finance to help you buy a car, the typical vehicle-buying process involves you finding a car, then applying for a loan to help you purchase it. Pre-approval is available from some car financiers, so you can head to a dealership knowing how much money you have to buy a vehicle. Discover everything you need to know about pre-approval and compare some of your options on the page below.
What's in this guide?
- Compare pre-approval car finance
- The ins and outs of pre-approved car finance
- How to get pre-approved car finance
- What types of car sales can I use with pre-approved car finance?
- Have you weighed up the benefits and drawbacks of pre-approval?
- Pre-approved car finance features
- Things to consider before applying for pre-approval
- How do I apply for pre-approved car finance?
- Have more questions about pre-approval?
Compare pre-approval car finance
The ins and outs of pre-approved car finance
When you apply for pre-approval, the lender evaluates your financial position based on the details you provide to determine how much you can afford to borrow. Lenders may also have restrictions on the types of cars they finance, so it needs to be sure the vehicle falls within these restrictions before it gives the final green light. It’s important that you understand pre-approval is only valid for a short period.
A significant benefit to a pre-approved car loan is that it gives you an advantage when it comes to negotiating the price of a vehicle. You know how much you have to spend and you can make an offer immediately. However, it also means you know your budget limitations, and if the salesperson can’t match your negotiations you have to walk away. So, if salesperson is offering competitive dealer finance you may not be able to take advantage of it.
While pre-approved car loans are not as widely available as other standard car loans, there are still a small number of lenders you can consider.
How to get pre-approved car finance
- Get a copy of your credit score.
- Ensure you have all your documents and pay slips.
- Compare a range of loans.
- Contact the bank or financial provider with whom you wish to apply.
- Shop around for your next car.
What types of car sales can I use with pre-approved car finance?
You can use a pre-approved car loan to purchase a car through a dealership, a private sale and at an auction. These are also the situations you can use a regular car loan. So in that regard, a pre-approved car loan serves the same purpose as a standard car loan.
Have you weighed up the benefits and drawbacks of pre-approval?
- Buyer confidence. Pre-approved car loans give buyers confidence that they have a good chance of getting finance for their chosen car.
- Understanding of your financial situation. The lender has already assessed your financials and has confirmed that you can afford the loan and therefore the car purchase, before you go out and buy it.
- Bargaining power. Pre-approval can give you the upper-hand when negotiating your price at the car dealership.
- Shorter periods of time. Conditional approval on some loans is only available for short periods of time.
- Limited choice. There aren’t as wid ae a variety of lenders who offer pre-approval as who offer car loans, so you have limited choice.
Pre-approved car finance features
You may get some of the best features and interest rates on the market with a pre-approved car loan:
- Secured against your vehicle. Interest rates are lower on loans that are secured using your car as guarantee, which saves you money and keeps your repayments manageable.
- Choice of fixed or variable interest rates. Keep your repayments the same each month or take advantage of the flexibility of a variable rate loan.
- Up to seven-year loan terms. Longer loan terms can help make the regular payments more affordable. Fixed rate loans may come with a maximum loan term of up to five years.
- Flexible repayment options. Payment choices may differ among lenders, but you can typically choose between weekly, fortnightly or monthly repayments.
- Extra repayments & redraw. Does your car loan allow borrowers to make fee-free additional payments and redraws to suit your ever-changing financial needs?
Things to consider before applying for pre-approval
There are a few things you should do before buying a car, and these vary from person to person. Here are a few things to bear in mind.
- Research your car. The make. The model. The year. The colour. You also need to take into consideration the vehicle’s fuel consumption.
- Check your financial standing. Car loans are a considerable financial commitment. Ensure you have the necessary funds or pre-approval.
- Test-drive the car. If you take the car for a test-drive, it lets you find out if there are any issues.
- Shop around. It is a good idea to not to buy the first car you see. You may find suitable cars at several dealers, so check out a few before you make a final decision.
How do I apply for pre-approved car finance?
Apply online to see if you qualify for a pre-approved car loan. You can compare your options using the table on this page and click ‘apply’ once you find the right loan for you. Keep information handy, ie your income details; employment information; other income, assets and liabilities, plus your photographic ID. Applying has never been easier, with some lenders granting pre-approval within 60 seconds.
Have more questions about pre-approval?
You asked, and we listened. Here are the top questions you have about receiving pre-approval for your next car loan.
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