What does being pre-approved mean for a car loan?

I’m in the process of shopping for a new car, and I was looking at how to get a car loan on my bank’s website. It said I could be pre-approved, but I’m not entirely sure what this means. What does being pre-approved mean for a car loan?

Answer
Shopping for a new car is exciting, and it’s great you were thinking ahead about getting your car loan!
Being pre-approved for a car loan means the lender has reviewed your application and credit history and can tell you the loan amount and interest rate you will likely be offered. Knowing you’ve been approved and the loan terms makes setting a budget and shopping much more straightforward.
Additionally, knowing your budget before you shop and will make you less likely to be talked into a more expensive vehicle or purchase add-ons you don’t need.
Getting pre-approved for a car loan has many benefits, and to ensure you’re getting the best offer, you should shop around and compare loan agreements from multiple lenders before signing any official loan contract.
Finally, once you’ve found a vehicle and are getting prepared to sign the loan contract, you’ll also need proof of insurance.
If you want to find the best car insurance policy for your new vehicle, use Jerry, an insurance comparison app, that shops for low prices with over 50 different insurance companies for free. You will get quotes in seconds, can make changes at any time, and if you ever have any questions, agents are just a text away! The average Jerry driver saves $879 a year on car insurance!
Jack Walsh
Answered on Dec 01, 2021
Jack is an insurance specialist and writer living in Buffalo, New York. He has a BA from Union College and worked as an insurance agent with Jerry before joining our content team. He enjoys using data and research to break down complex subjects and convey a story. In his spare time, Jack enjoys cycling, cooking, and exploring Buffalo’s beautiful waterfront.
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