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Pre-approved car loans
Car loan pre-approval gives you a strong indication of how much you can borrow when buying a car.
What is conditional approval?
Most car buyers find the right car first then apply for a car loan. But with pre-approval you can do it the other way round. You submit an application and the lender offers you a conditionally approved loan. Then you look for a car.
It's not the same as a full approval (you might get knocked back when you actually apply) but pre-approval gives you a decent idea of how much you can borrow and what it will cost you. That way you can shop for a car with more confidence.
Here are some competitive car loans that offer pre-approval
- Beyond Bank Low Rate Car Loan "Special Offer": 6.86% p.a. comparison rate. A limited time offer - get a car loan with a 6.49% p.a. variable rate.
- RACQ Bank Car Loan Special: 6.96% p.a. comparison rate. A car loan suitable for new vehicle purchases with no monthly administration fees.
- IMB New Car Loan: 6.59% p.a. comparison rate. A new car loan with no monthly service fees and no early repayment.
- bcu Car Loan: 6.8% p.a. comparison rate. A flexible car loan with redraw facility and fee-free early payout.
The ins and outs of pre-approved car finance
When you apply for pre-approval, the lender will determine how much you can afford to borrow based on your income, expenses, the amount you wish to borrow and the type of car you're looking to buy.
Why pre-approval is useful
- Buyer confidence. Pre-approved car loans give buyers confidence that they have a good chance of getting finance for their chosen car.
- Understanding of your financial situation. The lender has already assessed your financials and has confirmed that you can afford the loan and therefore the car purchase, before you go out and buy it.
- Bargaining power. Pre-approval can give you the upper hand when negotiating your price at the car dealership. You know how much you can spend, so you can make an offer there and then.
Drawbacks of car loan pre-approval
- Shorter periods of time. Conditional approval on some loans is only available for short periods of time (typically up to 3 months). After that you'll need to apply for pre-approval again or apply for a loan.
- Limited choice. Not every car lender offers pre-approval.
How to get pre-approved for a car loan
- Ensure you have all your documents and pay slips ready.
- Compare a range of loans that you can apply for.
- Contact your bank or financial provider you wish to apply with.
- Get pre-approved by the lender.
- Shop around for your car.
Note that not every lender offers pre-approval for a car loan. Some lenders simply require an application once you're ready to buy a car.
And many lenders can turn around loan applications quite quickly, which can be very useful if you don't have pre-approval.
What types of car sales can I use with a pre-approved car loan?
Pre-approved car loans are no different to other car loans. You can use one to purchase a car through a dealership, at private sales and at auction.
Things to consider before applying for pre-approval
There's probably a few things you should do before buying a car, and these will vary from person to person. Here's a few things to keep in mind.
- Research your car. The make. The model. The year. The colour. You'll also need to take into consideration the fuel consumption.
- Check your financial standing. Car loans are an extensive financial commitment. Ensure that you have the required funds and/or pre-approval.
- Test-drive your car. Taking the car for a test-drive will let you find out if there is any issues with it.
- Shop around. Go to a few dealers or multiple private sellers. Don't buy the first car you see.
Frequently asked questions about pre-approved car loans
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Ask a question
I hold a provisional resident visa (subclass 309) pending my permanent residency which is sooner. I have lived in Sydney for 1 year and 7 months. There is no restriction on my visa, and I have been working as a part time permanent for a year plus now. Am I eligible for Car Loan from any Bank?
Hi Dennis,
Thank you for your inquiry.
Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice.
Here are some steps for you to get a pre -approved Car Loan:
-Get a copy of your credit score
-Ensure you have all your documents and pay slips
-Compare a range of loans that you can apply for
-Contact your bank or financial provider you wish to apply with
Shop around for your next car
Before applying for any loan, please ensure that you meet the eligibility criteria and requirements of the loan option or lender and make sure to read the details, as well as the relevant PDS/ T&Cs of the loan option before making a decision and consider whether the product or option is right for you.
Please contact your preferred lender to inquire. You may click the ‘Go to Site’ button to submit an online application.
Best regards,
Rench
I have been pre approved for a car loan and went and found a car I liked today, and my bank said to make sure it was subject to finance which I did , do I let my bank know all the cars details and dealer details or does the dealer do that on my behalf
Hi Sharon,
You’ll need to advise the dealer that you’ve got a pre-approved car loan, but then you’ll need to give the details of the vehicle to the bank yourself. Following this the bank will pay the money to the dealership on your behalf.
I hope this helps,
Elizabeth
sir I have a 2011 buick lacrosse that I want to trade in for a 2016acura rdx so how does a pre approval work in this case . I owe approx. 8000$ on it
Hi Richard,
Pre-approval works depending on the lender you apply with, but this will be considered a refinancing loan. You can compare lenders using the table above and once you’ve found a lender you want to enquire with you can click through to its website. You can then find out the process and if the car is eligible for refinancing. You may also want to consider the services of a car loan broker which you can do on the table above.
I hope this has helped.
Thanks,
Elizabeth
Can you get a loan while being unemployed? Do car loaning places accept your application if your partner or parent is willing to pay your car loan until you get a job?
Hi Karina,
Thanks for your question.
When considering your application, most lenders will need to see proof of income before accepting your loan. Some lenders will allow a guarantor, but it’s best to do some research and speak to relevant the lenders before you apply to discuss your eligibility.
Cheers,
Shirley