While my friend who just purchased a car was in the dealership, he went with a pre-approval from a very good credit union which was giving him a very good rate. But, during the process, the dealership mentioned a few things which turned out to be correct on further research.
They are all out to get you. The question is whether you want to get screwed by the dealership or the credit union/ bank and who can do more serious damage.
These things do checkout about pre-approvals:
- It is just a pre-approval
- That rate could change when they actually process the loan. I call this situation a sucker punch.
No dealer is going to happily go with an external lender because that would be like someone buying a car with cash down. They lose money on that deal, so they would do something to screw you in some other way. The least of which would be to increase the sale price of the car.
That is a scary thought.
On the other hand, a pre-approval is a great bargaining tool because they may reduce lower than the MSRP so you go with their lender.
- There is more paperwork
