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How do I buy a car using a bank loan?
I want to finance a new car, but I’m not sure where to start. I know I want to use my current bank to do the loan, but that’s where my knowledge ends. How do I buy a car using a loan from my bank?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Buying a car using a bank loan is a simple process. You’ll need to get preapproval, select the car you want, and finalize the loan. The lender and dealership will take care of the rest.
A good place to start is with preapproval for the
car loan
. Unlike if you went to a dealership, preapproval from your bank is low pressure and provides you with a total approval amount, interest rate, and monthly payments based on your application profile. By getting preapproval, you can set a budget and use your preapproval amount in the negotiation process.Next, go to the dealership and see which cars fit your budget. Remember that you don’t have to spend the entire preapproval amount. Just use it as a guideline.
Once you’ve found the vehicle you want, get the vehicle identification number (VIN) and return to your lender. In addition to the VIN, your lender will also want:
- Proof of income
- Driver’s license
- Proof of residence (utility bills)
- Down payment method, if necessary
- Proof of insurance
After you close on the loan, the bank will hand you a check that you can take to the dealership. And just like that, you’re done!
Regardless of whether you want to use your current bank or you go with another lender, don’t forget about your car insurance. All lenders require full coverage car insurance when you finance a loan. So instead of choosing the first policy that comes along, search and compare quotes with the Jerry app.
As a licensed broker,
Jerry
helps you find and compare quotes from over 50 top providers in minutes. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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