Local Toyota dealer pre-approved my loan application?

My opinion is they are not being honest with you. They're selling you a garbage loan. 18% on a car loan is a total scam. You'll end up paying over $10k in interest. Try another dealer. If I were you, I'd use the $4k to buy a reliable used car (Honda Civic, Toyota Corolla, Mazda Protege, etc.) and get your credit rate up a little more before buying a new car. Good luck!