NFCU Auto Loan

[Anonymous]

I'm still a little confused, even after sending a secure message for support. 

How does an auto loan work? Lets say the car I want costs $30k and I want to carry that out over no more than 36 months and I put 50% down in cash (or wire transfer). When I ask Navy for a preapproval, is that a hard inquiry? Do I get my 50% downpayment back if I don't use the auto loan?

[polian]

A pre-approval is a hard inquiry. You are approved for a maximum of your requested amount. You decide the loan term at application. They send you a blank check to finish the deal with the dealer. The down payment is made to the dealer when you do the deal.

[Anonymous]

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@polian wrote:

A pre-approval is a hard inquiry. You are approved for a maximum of your requested amount. You decide the loan term at application. They send you a blank check to finish the deal with the dealer. The down payment is made to the dealer when you do the deal.

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Thanks, that helps clear up my confusion. Are all preapprovals hard inquiries, or does that heavily vary on the lender/bank? 

I've been watching YouTube videos for countless hours, but I don't feel like i'm learning anything. How exactly do you negotiate? And what do you negotiate on? I have stellar credit, and could pay the entirety in cash if I wanted. What cards do I have to play if I only come with outside financing? 

[polian]

I think with autos a pre-approval is going to be a hard inquiry across the board - you've essentially decided you're going to buy a car and have acquired the financing to do so. The only thing remaining is a final amount to issue payment to the dealer and the opening of the account.

If you don't have the confidence in your negotiation skills you can use an auto buying service which is flat pricing based on the options you want. There are are number of ways to do this... NFCU, Costco, Chase, Kroger, TrueCar and others I'm sure.

An alternate way to do this is to find a specific car you want (VIN), either use the buying service or work out a deal with the dealer with your down payment, then apply for financing for the remainder. They dealer will try to convince you to use their own, which sometimes results in a slew of HPs across all three bureaus (varies by dealer). That said, it could be advantageous to use manufacturer financing if you qualify and they are offering an incentive, like a 0%. If not, NFCU prime auto rate is at 1.79% for 36 months new. That's pretty good.

[trant3]

auto pre approvals or applications are hard pulls. The only thing you are negotiating is the selling price of the car with the dealership.