The time has come to replace your road-worn clunker. But, whether you want to purchase a used or new set of wheels it’s a hefty financial commitment. Fortunately, you have options — like a vehicle loan — to help you afford your next car or truck.
You can make the process smoother and less stressful by getting pre-approved for an auto loan. With a pre-approved auto loan, you’ll know exactly what your budget is and how much your monthly loan payment will be before you step into a dealership.
So, let’s get started and drive toward your next car with confidence.
Why get a pre-approved auto loan?
The Auto Loan
Here are some facts:
- Most people don’t have a stack of cash sitting around. They can’t just go out and buy a car outright.
- Even if you do have adequate funds, spending a lump sum on a car may not be an efficient use of your money.
- Using a credit card is either not feasible or not an optimal route.
Most people need or want financing to make buying a car possible.
Enter the auto loan. Auto loans are one of the financing options to purchase a vehicle.
The Pre-Approved Auto Loan
Having a pre-approved car loan takes it a step further by personalizing the process. With a pre-approved an auto loan you’ll be walk into a dealership with:
- A clear spending budget
- Predictable monthly payments
- Transparency about the financing cost of your vehicle
Additionally, pre-approval streamlines the paperwork, making the buying process faster and less stressful. Plus, you won’t need to navigate awkward financing conversations with the dealership.
Why choose a credit union for your auto loan?
Like refinancing a car through a credit union, there are good reasons why getting your auto loan from a credit union can be advantageous. Because credit unions are not-for-profit, membership-based institutions, they have a lot to offer that for-profit banks and car dealerships can’t.
Credit unions, like Valley Credit Union (VCU), offer several advantages over traditional banks and dealerships:
- Better auto loan rates
- Competitive interest rates
- Lower fees
- Flexible repayment terms
- Easier application and credit approval process
- Better customer service
- Member-focused service
Your credit union has a vested interest in you. It’s inclined to work with you to come up with a loan term that fits your life. Credit unions also tend to be more forgiving of a less-than-perfect credit history or credit score.
Certainly worth looking into! Comparison shopping for your auto loan is a smart move. You’ll likely find that credit unions have the best car loan deals.
The Auto Loan & Car-Buying Process?
You understand how loans work and the benefits of getting one through a credit union. But you might still have questions on how it all flows together:
- What are the actual steps in the loan application and loan approval process?
- What do you do once you have auto loan pre-approval? How do you take that and actually buy your car?
Loan Application & Approval Process
We can't speak for other lenders, but our car loan application process is fairly straightforward. In just a few steps you could be qualified for an auto loan and be ready to go car shopping.
Preparing to Apply
Before starting the loan process, it’s a good idea to do some honest and thoughtful prep work. It’s worth the effort to assess your lifestyle, financial situation and the kind of car you want to purchase. This way you’ll be ready to start the loan application and be able to make the right choices for yourself.
At VCU, we don’t have a hard-and-fast list of prerequisites you must meet to qualify for loan approval or vehicle refinancing. Instead, we look at each applicant’s request and personal situation individually. These are some of the things we’ll probably look at to assess your loan worthiness:
- Credit history
- Length of credit
- Loan-to-Value (LTV) of car loan requested
- Time as a VCU member
- Loan amount
Applying
Here’s what you can expect when you apply for a vehicle loan at our credit union.
Turnaround Time
All in, if you’ve already found the car you want to buy and your paperwork is in order, you may be able to close and sign your VCU auto loan in a single day. You can almost hear the jingle of new keys and smell the fresh upholstery now!
Using Your Pre-Approval to Buy a Car
Knowing what to do with that credit union auto loan pre-approval is a fairly important thing to understand. How do you actually buy your car with a pre-approved loan? Is it as simple as walking into a dealership and plopping the document on the finance manager’s desk?
Not quite. Don’t sweat it, though. We’ll lay it all out for you.
Shop with Confidence
Having a pre-approved auto loan can give you leverage as you shop for a car. You’re essentially a cash buyer, which puts you in a power position to some degree. (Having a car to trade in can bolster your position even more.)
If the dealer knows you have a loan locked in, they may take you more seriously. The dealer will likely skip traditional sales tactics that can put you at a disadvantage when it comes to negotiating. You may even be able to score some additional price concessions or get some bonuses thrown into your deal.
Buy with Ease
With your pre-approved VCU auto loan in hand, you can negotiate the sale price of the vehicle you’re interested in. Once you’ve agreed on the price, the dealer will give you a bill of sale that includes all of the details (cost, VIN, etc.). You’ll probably have to leave a small deposit to hold the car. Then you’ll bring the bill of sale to VCU and we’ll give you a certified check to present to the dealer.
It may seem like a bit of back and forth, but with all the paperwork in order in advance, it can flow rather smoothly and quickly. You’ll be driving off that lot in your shiny new ride in no time!
Why choose Valley Credit Union for your auto loan?
You are the reason we’re here! VCU exists to give our members the utmost in services and products.
We strive to make your car financing experience a good one — less hassle and the best deal possible. You’ll find our auto loans are competitive and flexible, to suit your needs. On top of that, our Auto Consulting program makes actually buying your new car straightforward. You’ll get personalized, expert advice and assistance from a pro.
About the Author
Justin Roberts, Vice President of Lending
Justin Roberts is our Vice President of Lending and has been in the financial industry for over 18 years. He is an Oregon State University Graduate and has just completed Western CUNA Management School. When he is not focused on helping the members at Valley, you will find him coaching his two sons and volunteering his time to help develop the youth in our communities through sports.