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Cherry Dale, a financial coach with the Virginia Credit Union, said when you get pre-approval before car shopping, you’ll know the interest rate you qualify for and be better prepared. “So, if you walk in with a pre-approval from your credit union or from your financial institution, it’s going to set you up to truly understand if you are getting the best deal,” Dale said.
She said if you don’t get pre-approval and the dealer pulls your credit during the purchase, you would have no way to compare rates. By having that pre-approval, you have a better chance of negotiating a the rate with the dealership. Pre-approval will also help with seeing how recent the recent Federal Reserve rate hikes impact your rate. As with financing increases across the board, rates for car loans are higher in general right now.