Pre-Qualifying for a Used Vehicle: What You Need to Know

March 17th, 2023 by

Owning a reliable method of transportation is a major necessity for the modern consumer. And, with the fallout from a worldwide microchip shortage affecting production quotas, many have taken to purchasing used vehicles to obtain better safety features and outstanding quality. And while used vehicles are known to sell at a cheaper price than new ones, sometimes securing the proper financing is necessary to make a purchase. There are a lot of questions regarding the world of auto financing; among them is what it means to pre-qualify for an auto loan. Today, we’ll try to make things more understandable. 
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What does Pre- Qualifying Mean? 

Pre-qualifying for auto financing is a way for lenders to access your current financial situation to determine whether or not you’re a trustworthy candidate for a loan. This allows them to estimate what rates you might be eligible for. This also gives you an idea of what your options are before undergoing a thorough credit check. (Which can sometimes adversely affect your FICO score.) 

Are Pre-Qualification and Pre-Approval the Same Thing? 

Despite the names sounding somewhat similar, there is a significant difference between the two. The pre-qualification process is for when you’re shopping around for rates to get a general idea of what you might qualify for. Pre-Approval requires a more thorough search of your credit history and occurs after you’ve picked a lender to do business with.

Which Process Should I choose? 

We recommend that you go through both processes as it will allow you to make an informed decision when obtaining financing for a vehicle. By using pre-qualification at the start, you’re given the scope of what might be available for you. This will allow you to shop around with different lenders and make a choice regarding which one will give you the best rate with the lowest APR. Once you’ve chosen a lender, it’s time to go through the pre-approval process. Before doing this, it’s advisable that you examine your credit report, as a hard pull can lower your credit rating for a short time period. It should also be noted that you can still be denied a loan if there are any irregularities in your application or credit history. If this happens, don’t give up! You can always apply again or go through a different lender.  

Yonkers Auto Mall 

Shopping for a vehicle should be easy, informative, and enjoyable. At Yonkers Auto Mall, you’ll find a wide selection of makes and models and a sales team that will help you make the ideal choice that’s best for you and your situation. For more information, cruise on over to automallyonkers.com.

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