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The power of a car loan pre approval

Written by

Shaun McGowan

One of the most stressful parts of applying for a car loan is the approval process - waiting for a response from your lender on whether they’ll lend you the money or not.

If this is your final step in the car loan process, it can be a stressful, anxiety-filled experience.

After all, you’ve found your car, you’ve filled in your application - but is it enough for the lender?

With car loan pre-approval, you can avoid this unnecessary stress entirely. Here’s how it works and how you can use it to your advantage.

What is car loan pre-approval?

Car loan pre-approval is an optional part of the loan application process, where a lender agrees to lend you a certain amount of money to buy a car without formalising the loan agreement or conducting a hard credit check.

When you ask for pre-approval from a lender, you’ll generally need to provide the same information as when applying - identity, employment and financial verification - and allow the lender to perform a soft credit check.

Once you have obtained pre-approval, you will have a limited amount of time to arrange for the purchase of your vehicle and submit an official loan application. Your lender will then need to conduct a hard credit check and receive an invoice from the dealership or private seller to release the funds.

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What are the benefits of having pre-approval?

Car loan pre-approval might just seem like a soft promise from a lender to give you the money, but the purchasing power you’ll receive from pre-approval goes far beyond that.

Car loan pre-approval helps:

  • Set a budget. Pre-approval lets you know how much money you can get approved for with a lender. Having this figure in mind ensures you don’t waste time looking at vehicles outside of your price range.
  • Find a better deal. Pre-approval is a solid indicator of your borrowing capacity. Having pre-approval from a lender is often a great way to compare similar offers to find an even better deal.
  • Negotiate purchase prices. Pre-approval gives you a figure to work from when visiting a dealership or speaking with a private seller, allowing you to haggle from a lower position up to your pre-approved borrowing amount.
  • Avoid unnecessary expenses. Dealerships are notorious for stacking on add-ons to their loans, from trying to sell finance to overselling insurance. Pre-approval ensures that you stick within a budget and aren’t swayed by these offers.
  • No obligation and no impact on your credit. Pre-approval is a limited time agreement between you and a lender, however there is no obligation for them to agree to this after the time limit is up.

Likewise, there’s no obligation for you to apply just because you’ve got pre-approval, which means there’s zero cost or worry involved if you decide to change your mind.

The downsides to pre-approval

As we looked at above, the double-edged sword of pre-approval is that it is only a conditional approval at the time.

This means that, should your credit score change, or you apply for a different loan amount, the lender is under no obligation to approve your loan.

You may also find that seeking pre-approval limits your options. Not every lender may offer pre-approval, and some lenders may even insist on a hard credit check to do so.

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How can I get pre-approval?

The easiest way to get pre-approval from car loan lenders is to simply use our Money Matchmaker™ engine - our lender partners show you real offers personalised for you.

We’ll show you the best deals we can find and, just like pre-approval, there’s no obligation or impact on your credit score. If you’re ready to experience the power of car loan pre-approval and see which lenders can offer you a car loan, speak to our Money Matchmaker™ today.

Get matched with the best car loan


Personalised loan shopping with Australia’s Money Matchmaker® aims to clear up the confusion around rates, fees, repayments and approval, so we can provide the best consumer experience possible.

The easiest way to find a competitive loan from lenders is to simply use our Money Matchmaker® engine. We’ll compare the best car loans we can find from our available pool of lenders, personalised entirely based on a few simple questions.

You can see exactly how much you’ll pay with each lender - this includes all the little details like fees and restrictions, so you can find the offer that suits your lifestyle the best.

Compare car loans from our list of lenders today to see how much you could save.

No stress, and no impact on your credit score.

Money Matchmaker

About the Author

Shaun McGowan from



Shaun McGowan

Shaun is the founder of and is determined to help people pay as little as possible for financial products. Through education and building world class technology. Previously Shaun co-founded and Lend.