How do I shop for a car if I get a preapproved loan?

I was recently preapproved for a loan, but I have no idea what the next step should be. What do I do to shop for a car and finalize the loan?

Answer
Getting preapproval for a car loan was a brilliant move. Now the fun of shopping for a car can begin.
Make sure to shop around to find the best price and test drive each car you’re interested in. Of course, now that you know your loan amount, don’t entertain any cars above your budget.
Your next step is to negotiate with the dealer. When you negotiate a purchase price, you can mention that you have loan preapproval, but don’t tell them how much it’s for. If you tip your hand, salespeople will try everything in their power to get you to spend the full amount.
Instead, use the preapproval letter as a bargaining tool to get the best price possible. Remember that you don’t have to spend the full amount for which you’re approved. You’ll owe less in the long run.
Before you go back to finalize the loan, shop around for the best insurance rates so you have proof of insurance to show the lender. With the free to download Jerry app, you can compare rates from dozens of insurers in minutes to find the best coverage for your needs.
Eric Schad
Answered on Nov 17, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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