Car finance pre-approval: Explaining what it is

Roman Danaev

2 June 2022

Buying a new or used car is always a big investment. Not every driver is able to pay for a vehicle outright using savings. It is much easier to contact Carplus specialists, who will provide pre-approval for the purchase — this will allow you to evenly distribute expenses to finance a car over the required period.

Let's take a look at why it's important to be pre-approved for car finance, whether it guarantees a client gets a loan, and how to apply for it.

What does pre-approved for car finance mean?

It won’t come as a surprise that a lender cannot provide a finance agreement to everyone who applies for one. If the applicant turns out to be insolvent, the company will suffer. That is why, before approving a loan, specialists ask the client to submit personal information for a soft solvency search.

First of all, the lender receives data on the borrower's identity, employment, average income, and place of residence for the last 3 years. After checking the solvency, the specialists ask which car the client wants to purchase and ask for copies/originals of identity documents.

If all verification steps are completed successfully, and the company understands that the client will be able to pay off the credit, then they will receive the status of “pre-approved for car finance.”

Does it include a down payment?

Not always. The client can make an initial deposit — this will reduce the total loan amount and increase the lender’s confidence. However, if there is no opportunity to make a down payment, then a car finance application can be submitted without a deposit.

Is pre-approval guaranteed?

If the lender has already run a finance pre-approval check and endorsed your request, then yes. The client receives a guarantee that the company will provide financing for the car purchase. Before submitting the documents and the application, it’s impossible to talk about the guaranteed approval.

What happens when you get pre-approved?

As soon as clients become approved for vehicle finance, they can start applying by submitting the required documents for their financing agreement. In general, the pre-approval of the loan allows clients to rationally assess how much they can borrow and how long to stretch the loan payments.

In addition, obtaining pre-approval is a “message” to dealers or previous owners that a client is ready to close the deal and meet all financial obligations. This gives more opportunities for conducting the negotiation process and buying a car becomes less complicated and stressful.

What's the difference between a free finance check and getting pre-approved?

Some companies offer free car financing checks — this is a matter of interest for many buyers. However, this is not the same as being guaranteed pre-approved. Any client can fill out a quick online form by submitting basic data and get a response to their finance application within 5 minutes.

Typically, the response ranges from"Highly likely to be approved"to"Low likelihood of being approved."This gives clients an idea of the probability they will receive the loan but doesn’t give any guarantee that the lender will actually present the final financing agreement.

How to get pre-approved for car finance

You don't have to spend a lot of time to get a pre-approved car finance agreement —most of the steps can be completed online! Choose a suitable car, fill out an application, send it, and wait for the experts' response.

1. Pick your used car

First of all, explore the range of available cars. Specify the type of transport, set the amount of the initial deposit and the desired mileage, and select the appropriate option.

2. Fill out an application on our website

Fill in all required fields of the form to provide the most comprehensive information for evaluation. Do not worry about the privacy of your data because our site is completely secure.

3. Send your application

When everything is ready, click"Submit Application."It will be checked by representatives of our platform on a first-come, first-served basis. Within a few hours, you will receive a response on the approval/denial of car financing.

4. Come and see us!

If you are approved, then don’t delay and visit us in person. Customers will be able to inspect the selected automobile and clarify all the details of interest! By the way, getting approval does not mean that you are obliged to buy the chosen automobile — the client always has the right to change their mind and choose something else.

Why should I get pre-approved for car finance?

In general, being pre-approved for car finance has several critical advantages:

  • Getting a realistic idea of the actual loan amount available;
  • Obtaining information on the distribution of monthly payments;
  • Getting more bargaining power when concluding a contract with an automobile dealer or next used car owner.

So, it’s great to go through a free car finance check and then contact Carplus specialists to get approval to be sure of getting a loan.

Why haven’t I received a decision?

If you submitted an application but did not receive a response in the next few hours, then the request was probably submitted after business hours. As soon as the experts reach a verdict, the client will receive an SMS at the specified phone number or a letter at the current mail address. It is also worth making sure that you entered your contact details correctly — be sure to check them before submitting an application!

Get in touch with our brokers for assistance

If you still have questions about finance pre-approval for a car purchase, then you can always contact our representatives for more accurate information. Additional help and expert advice are always available. Finally, decide on a car, leave a request for pre-approval on the Carplus website and get one step closer to making your dream come true!

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