April 16, 2024The Power of Auto Preapproval

The Power of Auto Preapproval 

Ready for a new ride? Whether you want a change or your current car is showing signs of wear and tear, it can be overwhelming to know where to start. You’re not alone. With so many options out there, it’s easy to feel overwhelmed. But here’s a game-changer you might not have considered: an auto loan preapproval.

At PEFCU, we call this an Express Pay Draft. It’s like having a golden ticket to a car shopping paradise, giving you the freedom to explore without stressing about your budget. So, if you’re even slightly tempted by the idea of a new or used ride, getting preapproved could be your secret weapon to finding the perfect fit without breaking the bank. Best part – you don’t need to know what specific vehicle you want or which dealer you will be purchasing from. With a Express Pay Draft, you’ll have the flexibility to choose what makes the most sense for you when shopping.  

Why You Need a Preapproval 

A preapproval letter is one of the most powerful tools you can have when buying a new or pre-owned vehicle. When you are preapproved, you’ll have the upper hand when it comes to negotiating with dealerships, have protection against unnecessary add-ons, and most importantly, stay within your budget while getting the ride you really want.

What Is a Preapproval? 

It’s easy to practically stop by any dealership you want and buy a vehicle before applying for a loan at your financial institution, but not wise. While this might seem more convenient for some people, it could also cost you a lot more money in the long run.  

But you can make the wise choice by using PEFCU’s Express Draft feature, giving you both convenience and money-saving opportunities! To get a preapproval letter from PEFCU, all you need to do is apply  online, through our mobile banking app, or by visiting any of our branches BEFORE you go shopping for your new vehicle. Once you’ve supplied all necessary information to PEFCU and finalized documents, you’ll be issued your preapproval letter (Express Draft) outlining your approval terms. 

Staying Within Your Budget 

Too often, people focus solely on how much they can afford each month as a payment. Dealerships use a lot of tricks to make it seem like payments on an overly expensive vehicle fit into your monthly budget (e.g., extending loan terms). A preapproval letter helps shield you from being duped into overspending.  

When we preapprove you for your new or used vehicle, we’ll look at your current financial situation with you. How much debt do you currently have? What types of debt? What is your current income? We’ll use this information to help you figure out exactly what you can afford so that you can stay within your budget. 

Negotiating Power 

With a preapproval, you’re in the driver’s seat when it comes to negotiating. You know exactly how much you’re approved to borrow and know you cannot—and should not—go over that amount. Dealerships cannot try putting you in an unaffordable vehicle or adding on unnecessary features. 

Dealerships want to sell vehicles. Many have quotas they have to sell each month. While it’s not guaranteed, many times dealerships will drop prices to meet your preapproved amount just so they can get the vehicle off the lot. Remember – dealerships want to sell cars, not lose your business over a few hundred dollars.  

Extra Protection 

When you are preapproved, we’ll offer you additional options, including GAP (Guaranteed Asset Protection) and Extended Warranties. These are the same programs dealerships will often offer you – EXCEPT – our programs are usually up to 50% less than dealerships. 

Plus, your preapproval letter protects you from a bunch of extras dealerships try to add on once you get to their finance department. Since you cannot go over your preapproved amount, they won’t try to sell you any of these unnecessary services. 


Because a preapproval is such a powerful tool for YOU – dealerships will often try to convince you it’s not good enough. They will tell you that they can get you a better deal if you finance it through them or one of the lenders they get kickbacks from. They will even try to get you to fall in love with a vehicle out of your preapproved limit so that you have no choice but to ditch your preapproval letter. 

Don’t fall for these sales tactics. They are just trying to get more money out of you. Remember, a preapproval keeps you in your budget, gives you the upper hand with negotiating, and protects you from unnecessary extra expenses. So, of course dealerships will try to get you not to use it to your advantage! 

We’re Here to Help! 

If you’re ready to go car shopping, stop by and see us first. It doesn’t take long to get preapproved, and it could save you a bundle! Simply apply via your PEFCUMobile or PEFCUOnline; or stop by any branch location. For any questions, please call us at 1-800-226-6673. 

Before you go shopping – get your most powerful car-buying tool from us first!  



Each individual’s financial situation is unique and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.   


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