I will be car shopping next week. There's a few cars I'm interested in. I am pre-approved at my bank for an auto loan (still have to apply). Should I start applying for loans now? How will it affect my credit? (My credit is already pretty good). Some of the models I'm interested in are offering 0% on their loans. Do I apply for those on the internet before I go to the dealers? If I apply for more than one of the car manufacturer loans will that affect me with the car loan I end up with?
Stupid Flanders2011-12-20T11:18:08Z
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If you know you will be financing a car in the next 30 days, you have nothing to lose by applying for financing now through multiple lenders. . I have no concept as to what your credit is like or what interest rate you are approved for, but I would recommend going to your local credit union to get approved,
Then, you keep this information in your back pocket until it's time to talk with the finance guy. Tell him you are pre-approved at X % and he can search his lenders to beat the rate. He is motivated to help you because he gets kickbacks from his lenders to place your business, regardless of the APR.
Use your pre-approved financing as a worst case scenario. 0% is a good rate, but sometimes it makes sense to take the cash back on some vehicles; especially if you can get approved for under 3% (current going rate for anyone with very good credit).
When you apply for a loan, your credit takes a hit. However, you can apply for as many auto loans as you want in the next 30 days, from your first application, without it taking an additional hit on your credit. The credit bureaus recognize that you are shopping for a specific loan and will not hold that against you.