There are numerous reasons to get pre-approved for a car loan. Not the least of which is knowing beforehand whether you can buy and afford the car you want and need. Pre-approval also means that you’ll have an easier time at the dealership when purchase negotiations begin. It will give you some power over those negotiations, as the dealership will now be obligated to find a loan that’s better than yours or sell without getting the loan credit they often depend on for profit.
Getting pre-approved can be good or bad for your credit, however, depending on how you go about it. The trick isn’t to get pre-approved first, but to get pre-qualified first. Here we’ll explain why that is, what it means for your credit, and how to get it done correctly.