Considering buying a car from a private seller, but still need an auto loan to pay for it? Here’s how!

When purchasing a car from a dealer, there are processes in place for getting an auto loan, but did you know you can also get a loan when buying from an individual? Absolutely! Here’s what you need to know about getting an auto loan for a private party sale.

What’s a private party auto sale?

A private party sale simply means you’re buying your car from an individual rather than a commercial business like a dealer. The seller could be a family member, friend or anyone else.

How do I get an auto loan for a private sale?

Applying for an auto loan for a private sale isn’t much different at the start. Much like applying for a loan for a dealership purchase, many financial institutions recommend prequalifying for your auto loan to ensure your financing is lined up ahead of time.

By having your loan prequalified before the sale, you’ll have a much better idea exactly how much you’ll have to apply toward your purchase.

Once you find a car to buy, your lender will appraise the value of the car. You can check the value of most makes and models here.

Is loan qualification required for private auto sales?

Prequalification isn’t required but at some point you’ll have to fill out a loan application and many buyers find it convenient to get it done sooner rather than later. At Consumers, you can work directly with us for an auto loan. Apply online or contact a Consumers loan officer at 800.991.2221.

Can I use other loan types to buy a car from a private seller?

Personal loans are commonly used for these types of sales. With an unsecured personal loan, you don’t need collateral, so a lender won’t appraise the vehicle’s value.

Whichever loan type you choose, the lender will disburse the funds one of two ways, either to you or directly to the seller upon purchase of the vehicle.

Completing the purchase of a car from a private party

Like most big purchases the deal’s not done until the paperwork is done. To complete the purchase of a car from an individual, the following needs to be done:

• The seller receives payment.
• The seller signs the title over to you.
• You insure the car.
• You register the car in your name at the Secretary of State (take the title and proof of insurance when you go).
• You make monthly payments as scheduled to repay the car loan.

That’s it! Getting a car loan for a private party sale is actually very simple. Just remember to do all the paperwork to ensure the car is insured and registered in your name.

 

All loans subject to approval. Rates, terms, and conditions are subject to change may vary based on credit worthiness, qualifications, and collateral conditions.