When it comes to securing an auto loan or refinancing an existing one, finding the right lender can make all the difference. Auto Approve, founded in 2016 and headquartered in Plymouth, Minnesota, offers a unique approach to vehicle financing through a network of banks, finance companies, and credit unions nationwide. In this review, we’ll delve into the specifics of what Auto Approve offers, its pros and cons, and how you can determine if it’s the right choice for your needs.
What is Auto Approve?
Auto Approve is an online lending platform specializing in vehicle and motorcycle refinancing, as well as lease buyout loans. With loan amounts ranging from $10,000 to $150,000 and repayment terms extending from 12 to 120 months, Auto Approve provides flexible options tailored to various borrower needs.
The company advertises a minimum interest rate of 5.24% as of January 2024; however, the actual rate you receive may vary based on your lender and financial profile. Despite some opacity around its rates, Auto Approve claims that customers save an average of $138 per month by refinancing with the company.
Pros
- Lower minimum rate than the national average
- No Social Security number required to get a quote
- Offers vehicle protection plans and Guaranteed Asset Protection (GAP) insurance
Cons
- No auto purchase loans
- Charges a variety of fees
What Auto Approve Offers
Vehicle and Motorcycle Refinancing
Auto Approve’s primary offering is refinancing for various types of vehicles, including cars, motorcycles, trucks, SUVs, recreational vehicles (RVs), boats, and all-terrain vehicles (ATVs). Note that Auto Approve doesn’t refinance commercial vehicles, heavy equipment, or vehicles titled in a company’s name. Most refinancing customers benefit from lower monthly payments, according to the company.
Lease Purchase
Auto Approve provides two types of lease buyout loans:
- Lease-end buyout: This allows borrowers to purchase or refinance their vehicle when their lease ends.
- Early buyout: This option lets borrowers purchase their leased vehicle before the lease term concludes.
Vehicle Protection Plans and GAP Insurance
Both refinancing and lease buyout loans allow borrowers to add a vehicle protection plan, which covers work by Automotive Service Excellence (ASE) certified mechanics, 24/7 roadside assistance, rental car reimbursements, and courtesy towing. Additionally, the company ensures borrowers have GAP insurance on new loans. The costs for both the vehicle protection plan and GAP insurance are rolled directly into your monthly payments.
Minimum Borrower Requirements
Auto Approve doesn’t publicly disclose its credit requirements or other underwriting criteria, as these will vary depending on the partner lender. However, you generally need a credit score of at least 640 and must choose a loan term of at least 72 months to qualify for the lowest advertised interest rate. Ultimately, your approval and interest rate depend on your creditworthiness, payment terms, the vehicle being financed, and the particular lender.
What Fees Will You Pay?
Auto Approve fees vary by state, lender, and whether you’re refinancing or buying out a lease. Common fees include administrative fees, doc fees, title transfer fees, and state fees (if applicable). However, there’s no application fee. These fees are incorporated into your loan amount, meaning you don’t have to worry about out-of-pocket costs when completing your refinance.
Additionally, you may incur additional costs for optional plans like GAP insurance or extended warranty coverage.
How to Apply for an Auto Approve Auto Loan
Step 1: Check Your Rate
Whether you’re refinancing or looking to buy out your lease, shopping around and comparing lenders is crucial. To see your personalized rate from Auto Approve, request a quote and provide basic information such as your name, contact details, credit score, and vehicle information. Notably, you don’t need to provide your Social Security number to get a quote, and it won’t impact your credit score.
Step 2: Review Your Loan Options
Auto Approve provides loan quotes within seconds. After submitting your information, a loan consultant will walk you through the options you qualify for and help you choose the best one for your needs.
Step 3: Complete an Application
Once you select a loan option, the loan consultant will assist you in submitting a full application and any required documentation to your chosen lender. Loan approval typically takes just a few minutes, and if approved, your rate will be locked in for 30 days. Note that moving forward with a loan triggers a hard credit inquiry, which could temporarily impact your credit score. However, if you apply for multiple quotes within a short period (usually 14 to 45 days depending on the credit scoring model), they will all count as one inquiry.
Step 4: Finalize Your Loan
After your loan is approved, you’ll need to complete some final steps before receiving the funds. This includes signing the loan agreement and any other required documents, providing proof of insurance, and paying any necessary fees or down payment. Once everything is finalized, your funds will be disbursed and you can start enjoying your new vehicle.
Additional Tips for Applying for an Auto Loan
- Prioritize maintaining a good credit score to increase your chances of getting a low interest rate.
- Make sure to thoroughly review the terms and conditions of the loan before signing any documents.
- Consider getting pre-approved for a loan before going car shopping to have a better understanding of your budget.
- If you’re not satisfied with the quotes or options provided, don’t be afraid to shop around and get quotes from multiple lenders. Just be mindful of the impact on your credit score if you do so within a short period of time.
- Keep in mind that the total cost of the loan includes not just the interest rate, but also any fees and charges associated with it.
- Be wary of loans with extremely low interest rates as they may come with hidden fees or variable rates that could increase over time. Always read the fine print carefully before committing to a loan.
- Consider refinancing your auto loan if you find a better deal in the future, but make sure to weigh the costs and benefits before making the switch.
- Remember to make timely payments on your loan to avoid damaging your credit score and potential repossession of your vehicle.
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