While many Australians leave applying for finance until after they’ve found the right car, being pre-approved can make the whole car shopping experience so much more enjoyable and empowering. Here are a few things to consider.
What is pre-approval?
Being pre-approved is when a lender, such as Liberty, agrees to lend you money to buy an asset like a house or a car, before you’ve found it. The lender assesses your credit application and if you are pre-approved, you can be assured of how much you can borrow.
Why get pre-approved for a car loan?
Being pre-approved for a car loan gives you the peace of mind that finance is sorted before you start looking for a car. It can also give you a clear indication of what cars are in your price range before you start shopping.
By knowing your borrowing power and monthly repayments, you could negotiate down the price on a car that might otherwise be out of your reach.
What are the benefits?
One of the benefits of being pre-approved for a car loan is that it allows you to avoid using the dealership’s designated finance options which may not be as competitive.
Most dealerships have a nominated finance person in-house, who may work with a finance company it has partnered with.
When a customer wants to buy a new car, they are often encouraged to use the dealership’s finance company.
While this may seem convenient, it could leave buyers with fewer options around interest rates, features and terms associated with the loan.
By getting pre-approval from a lender, you may find a loan that works better for you, instead of accepting a loan on terms presented to you only after you’ve selected a car.
What if I’m buying from a private seller?
You don’t have to buy a car through a dealer to get finance. There are lenders that also provide pre-approved finance for private sales.
How do I get pre-approved for a car loan?
The easiest way to get pre-approved for a car loan is by talking to a finance specialist. They will be able to tell you about the lenders and options available and also guide you what information is needed to apply.
If you’re thinking about getting a car loan to purchase a new vehicle, speak to your nearest Liberty Adviser about getting pre-approved today.