Why You Should Arrange Car Financing Before Visiting a Dealership


The way the car buying process works today, it makes sense to get approved for car financing before visiting a dealership. This gives you time to shop around different lenders until you’ve found a rate you’re happy with. Setting up for financing before visiting a dealership is also a great way to ensure you don’t buy a car you can’t afford. In this article, we’re going to talk about the benefits of setting up car financing before visiting a dealership and how to do it. 

Benefits of Arranging Finance Before

You’re Getting the Best Term Possible

Before you ever step foot into a dealership you can have your interest rate, monthly payment and length of term all known based on your credit score. Having all of this information and knowing what you qualify for before buying the car means you know you’re getting the best deal you could qualify for. 

Confidence Going Into a Dealership

Going into a dealership knowing you already qualify for financing terms you’re comfortable with will give you so much more confidence. You don’t need to worry about whether or not you’ll get approved for a good rate. This leaves you focusing on finding a vehicle in your price range without the extra added stress of worrying about financing. This also gives you more leverage to negotiate if a vehicle price is currently sitting a bit higher than what you had been pre-approved for. 

You’re More Prepared

Having financing already in place before walking into a dealership means you need to worry only about the overall price and not the monthly payments. This makes the process much easier, allowing you to think more clearly about your decisions and hopefully getting you the best car.

How To Setup Financing in Advance

1. Shop Around

The first thing you’ll want to do is shop around, you can do this two different ways. You can either go on lender websites online to see who has the best rates without having to include much personal information about yourself or you can call lenders and ask for quotes. Chances are the more quotes you get, the more competitive the rate will be. We recommend getting quotes from three different lenders at the very least. 

2. Check Dealership Rates

Some dealerships are fairly transparent about their financing rates. So once you have a quote, you can then look at dealership websites and compare their financing rates compared to your quote. It’s entirely possible that the dealership will be able to offer you a better rate than your lender so if this is the case you can always go back to the lender and see if they’ll beat the dealer financing rate.

3. Get Pre-Approved

The last thing you should do before you walk into a dealership is getting pre-approved. Getting pre-approved is quick and simple, and you can do it here! Simply complete the short application, see what you qualify for and you’re set. This enables you to walk into a dealership with an offer in hand, making negotiating much easier. 

4. Negotiate With Multiple Dealers if Necessary

Now that you’re pre-approved for a given amount, the ball is completely in your court. Check out multiple dealerships with your pre-approval and see who is willing to give you the best deal. Dealers won’t be able to try anything sneaky by using extended term lengths to make your monthly payments smaller because you already have financing set up. At this point, it’s about coming to an agreement with the dealer on the overall price of the vehicle you want. If you feel like the dealership is being too pushy, walk out and go to the next one. When you’re pre-approved, you have all the leverage so don’t put up with any aggressive or unfair sales negotiations.

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