Weighing your options for car finance, but not sure how much you’ll be able to borrow? Getting pre-approval for a car loan can help you do just that, as well as take a lot of the stress out of making such a big ticket purchase. Regardless of whether you’re planning to buy a modest family car, or a fun and flirty weekend convertible, getting pre-approval for your car loan is encouraged for everyone.
This guide will provide an overview of the process for getting pre-approval for a car loan, the benefits for doing so, as well as other considerations you may have about the purchase decision.
Can you get pre-approval for a car loan?
As a borrower, you can indeed apply for pre-approval for a car loan — in fact, it’s very common (and recommended). Pre-approval for a car loan is essentially a ‘green light’ from a financier that you will be able to borrow a specific amount for your car purchase. Think of it as an advanced confirmation of your ability to borrow an amount of money to fund your future car purchase.
Getting pre-approval for a car loan will streamline the buying process for you — the borrower — with pre-approval, you can get the funds you need quicker to proceed with a purchase.
Why it’s worth getting pre-approved for a car loan
Here are four key reasons to get pre-approved for a car loan:
Stick to a predefined budget
Pre-approval is an accurate indication of how much you will be able to borrow — this helps you stick to a predefined budget and avoid going overboard with a car purchase that you won’t be able to realistically afford. With the preapproval borrowing amount in mind, you can carry out your search for a vehicle much easier by sticking to what can be comfortably purchased.
Understand your financial position
Pre-approval provides a clear overview of your financial position by presenting you with a concrete loan amount upfront, before making any costly decisions. The pre-approval borrowing amount helps to eliminate any financial stress and gives you the freedom to make a decision in your own time.
Improve negotiation power
Pre-approval enhances negotiation power by demonstrating to sellers that you are a serious and capable buyer. It shows that you have the ability to actually make a purchase, giving sellers more reason to give you a better offer in order to close the deal with you. As such, you can more confidently negotiate for a better deal.
Expedite the car purchase process
Pre-approval streamlines the car purchase process, making it much easier and quicker for you to get the necessary funds for the purchase. This means that you can get the keys to your car earlier and start driving sooner!
Process for getting pre-approved for a car loan
Getting pre-approved for a car loan is simple — in fact, you can do it within a couple of minutes with Credit One.
Here’s what you’ll need:
- A proof of your income (payslips, tax returns)
- A proof of your identity (driver’s licence, passport)
Once you have the above documents, simply contact our team of car financing brokers. After a quick consultation with you for a pre-approval application, we’ll work out the best options for you from our approved lenders. All that’s left is to wait to receive your pre-approval offer!
What happens once you’re pre-approved?
Once you have pre-approval, you can start looking for the car of your choice. Of course, keep in mind the borrowing amount stated on the pre-approval to help guide your search. You can also negotiate with dealerships and sellers for the best purchase price. After you’ve chosen a car to buy, we’ll help you finalise the details of your loan with the lender.
How long does pre-approval typically last for?
The valid term of the pre-approval will typically depend on the lender, but it will generally last between 1-3 months. During this time, the pre-approval will apply to any car purchases that you choose to make. Once it has expired, however, you may need to reapply for new pre-approval as financial circumstances might have changed since then.
What if you don’t end up purchasing a vehicle?
There’s no real downside to getting a pre-approval on a car loan. Even if you don’t end up purchasing a vehicle, you’ve not signed for the loan, so you are not bound by any terms.
Apply to get your car loan pre-approved with Credit One
Credit One is Australia’s leading broker of car finance options, offering a network of over 40+ approved lenders. If you need pre-approval for a car loan, our team at Credit One can help you find the right lender, so that you can move towards getting the car of your dreams. Contact us today to get started with a quote or to talk to one of our car finance experts to learn more about our loan solutions.
