Car finance: timing is everything

Should I get preapproved car finance before I go to the car yard?

Many customers fear that getting preapproved car finance before they find the car they want will limit their options and restrict their choice.  The reality couldn’t be more different.

We recommend you don’t set foot in the car yard, or start to look at what cars are available from private sellers until you have pre-approved your car loan.  And here’s why.

How preapproved car finance works

If you have used our car loan calculator you will already have an idea of how much money you can comfortably afford to borrow.  Going to the car yard with this figure in mind would give you a rough idea of where to start (and stop!) looking amongst the cars available.  It will keep you on track and stop you overspending.  Or so you would think.

Car finance = power!

The skill of a good car salesman

After “Hi, how are you?” the first question most customers are asked when they enter the car yard is, “How much are you looking to spend?”  To the customer, the figure they give is the figure they intend to spend.  But to the salesman, the figure they hear is the figure that they will work up from to get you the car you want.

The conversation usually then turns to how you intend to use the car, who will be in it, what your hobbies are and other general questions about the things you enjoy in life as well as in your car.  This gives the salesman an idea of the type of extras that you would like and would therefore likely be willing to pay “just a few hundred/thousand dollars more” for.  The car salesman will start mentally going through the cars available that have that something extra he can present to you.

Before you know it, you are seeking car finance for a vehicle that is outside of your comfortable range.   With a loan bigger than you intended you have to cut back on other areas in your life to ensure that you can pay it back.  Something has to give.  But with preapproved finance the picture is vastly different.

Power to the People!… with pre-approved finance

The customer with a preapproved car loan walks into the car yard with power.  They know how much they can get and they know that this is a figure they are comfortable with.

When the salesman approaches he or she will go through the same routine.  The customer will answer the same questions in the same way but the end result will be different.

Once the customer finds a car they like, one that may be just a bit above their approved limit, they can turn to the salesman with the simple line, “I like this one but I’m preapproved up to $x so you’ll have to do something about the price.”

You are no longer asking for a discount, you are expecting a discount.  Control over the sale and the result has moved neatly into your hands.

Should you get pre-approved car finance before you go to the car yard?

Definitely.  And remember, your car finance preapproval amount is not set in stone.  If you need to increase it by a few thousand dollars this is (usually) easily done. Furthermore, you are not locked into any particular car yard. And can even buy privately if you want.

The other advantage in having a pre-approval, and letting the salesman (or private seller) know it, is that you are showing them that you are not just a “tyre-kicker”. You’re a serious buyer. Knowing that may make them just a little more prepared to negotiate on the price with you

Do you want control over the sale?

Use our car loan calculator to find out how much you could comfortably borrow.  Then speak to one of our friendly team on (08) 9227 7233 to get your car finance approved and take control of both your sale and your result. 

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North Perth WA 6006
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