Know Before You Go to the Dealership

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If you’re in the market for a new or used vehicle, the process of narrowing down your dream car should be exciting. After some online research to find out more about the models that are right for you, the thrill of buying a car may give you the urge to visit the dealership as soon as possible and it can be easy to overlook some of the smart financial details you need to consider aside from the price tag. 

First thing’s first — how do you plan on paying for your car? If you hope to borrow, then pre-approved auto loans are the most reliable way to finance your car while staying within budget. Plan accordingly with this guide on what you should know before you hit the dealership.

Get Pre-Approval for Your Auto Loan

Getting pre-approval for an auto loan is a reliable method of locking in a potential loan amount, loan term, and interest rate from Police FCU.

The application process involves filling out forms with relevant financial information such as proof of income, employment status, and credit history. After your lender runs a credit check and reviews your financial information, you’ll be presented with a package that is an estimate of your monthly payment, which is calculated based on your loan amount, loan term, and interest rate, as previously mentioned. 

The use of a loan calculator can also help you get a good idea of what you will be paying once your auto loan application receives final approval.

Create a Budget with Your Findings

Now that you’ve received the details of your pre-approved auto loan, it’s time to create a budget with the amount you can borrow and its corresponding interest rate. 

It’s commonly suggested that your car’s purchase price should be less than what you are actually approved to account for your vehicle purchase’s taxes and fees. However, an auto loan from Police FCU covers up to 120% of financing — which includes these additional costs. So if your dream car fits within the budget you have created based on what you can borrow, don’t hesitate to hit the dealership!

Focus on Your Potential Car’s Purchase Price

Pre-approval on an auto loan gives you the opportunity to visit a car lot with the peace of mind knowing that you’ve gotten the most competitive rate you can qualify for. Dealerships, on the other hand, are oftentimes likely to hit your wallet where it hurts. 

A dealer may throw in hidden costs by steering your focus towards monthly payments, rather than your potential car’s overall purchase price. Remember to enter the car shopping process as the negotiator — not the other way around. 

With a loan amount, interest rates, and terms already in place via pre-approval, any negotiation should come down to whether or not the dealership is prepared to sell you a car within your budget. Once you are pre-approved, it’s time to check out a few dealerships with the confidence level of a cash buyer!

Learn more about Police Federal Credit Union’s competitive auto loan products, rates and apply today!

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