topic How does auto loan pre approvals work in Auto Loans

How does auto loan pre approvals work

Anonymous — Thu, 30 Aug 2012 18:20:23 GMT

Hello,

I am in market for a new car. As per the advise from here I went to Affinity here near my home opened an account and applied for an auto loan last week. After a week of waiting to hear back from them on the status of auto loan I called them today to find out I am approved for their advertised rate of 1.99%. Now the strange part - as per the customer service rep I would not be receiving anything in writing from them regarding this approval. I have to finalize the car and send them the purchase order and they will deal with the payment. Is this the was CU works?

Does anybody has any experience in dealing with Affinity FCU and can anybody provide a detailed insight on how the whole process works.

Re: How does auto loan pre approvals work

djrez4 — Thu, 30 Aug 2012 20:27:29 GMT

That's pretty standard. There are two ways auto loan pre-approvals can work:

1) They do as Affinity did and tell you you're conditionally approved pending verification of the collateral and other info. They'll have you send in the PO and other docs to make sure you're really buying what you say you're buying and for the correct amount. Once you select a vehicle, the dealer will draw up the purchase order or sales agreement with all of the numbers on it. You fax it to the bank and wait for them to verify it. If everything is aboveboard, the bank issues a check and sends it out to the dealer or to you.

2) The Cap One/Up2Drive method - you get approved for a certain amount at whatever rate and they send you a blank check that you then write to the dealer. The dealer is instructed that the check can't be for more than a certain percentage of the value of the car (usually 110%). You walk in and walk out with the car.

Re: How does auto loan pre approvals work

Anonymous — Fri, 31 Aug 2012 14:17:02 GMT

@djrez4 wrote:
That's pretty standard. There are two ways auto loan pre-approvals can work:

1) They do as Affinity did and tell you you're conditionally approved pending verification of the collateral and other info. They'll have you send in the PO and other docs to make sure you're really buying what you say you're buying and for the correct amount. Once you select a vehicle, the dealer will draw up the purchase order or sales agreement with all of the numbers on it. You fax it to the bank and wait for them to verify it. If everything is aboveboard, the bank issues a check and sends it out to the dealer or to you.

2) The Cap One/Up2Drive method - you get approved for a certain amount at whatever rate and they send you a blank check that you then write to the dealer. The dealer is instructed that the check can't be for more than a certain percentage of the value of the car (usually 110%). You walk in and walk out with the car.

@I believe it is # 1 with Affinity. I will not be getting anything in writing but I am approved for $30,000 (the amount that I put in the application that I might need) @ 1.99%. I need to submit the PO to the CU thats what I am told.

Can I just use less that what I am currently approved for since I am planning to put atleast 20% down and the car will not be going over 30,000 with all the fees and tax included.

Is there a requirements for DP as it was never mentioned (I ama nyways prepared for it)

Normally how long does it take to drive the car off the lot once I submit the PO to the loan officer at Affinity?

Can I fax the PO or have to mail in the original?

THey never asked for my paystubs, will that be needed with PO or I am fine.

Does anyone think I will be facing an uphill task convincing dealer to go through CU process? I am not going to take up dealer financing unless they give me a better deal.

I am doing this auto loan through the CU for the first time.

Re: How does auto loan pre approvals work

djrez4 — Fri, 31 Aug 2012 20:06:20 GMT

You certainly don't have to use all $30k if you don't want to.

I can't tell you if there's a down payment requirement or not. That's up to the CU.

You can drive off the lot as soon as you get the official approval from the CU. You don't have to wait for the check to arrive. What the dealer will do is make you sign a document saying that you will accept their financing if you don't show up with the check from the CU within a certain amount of time.

I've been able to fax the PO. YMMV, but I don't see why they'd need the original. Ask the CU.

The dealer isn't going to balk at the CU loan process. They're used to it. Go through the motions with everyone and do what you need to do.

And, enjoy the new car!