PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
What does preapproval from a car dealership mean?
The car salesman at my local dealership keeps preaching about preapproval and that I should get it before shopping. What does this mean?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Preapproval for a
car loan
is a conditional approval for a future loan, which can make shopping for a car way easier in terms of budgeting and negotiation.To get preapproval, you apply with lenders just as you would with a traditional car loan. The lender looks at your income, credit score, and debt-to-income ratio to determine how much they will approve, as well as the terms and interest rates of your potential car loan.
While you can seek preapproval at the dealership, you should also search around for other rates with banks, credit unions, and online lenders.
Some of the benefits of getting preapproval include:
- Budgeting for a car within your means
- Better negotiating power since you’re only allowed to spend a certain amount
- Focusing more on the purchase and what type of car you want rather than worrying about financing
Following car loan preapproval, you still need to shop for one more item other than your car: insurance. Every lender will require full coverage car insurance, so that’s when you can use
Jerry
to compare quotes. Sign up in minutes to search quotes from over 50 reputable carriers.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.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies