Yes, you can finance a car bought from an individual! Learn how it works.

When purchasing a car from a dealer, there are processes in place for getting an auto loan, but can you also get 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 sale?

A private party sale simply means you’re buying 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?

Prequalifying for an auto loan helps you enter into a deal with the confidence that your financing is lined up. To prequalify, you’ll fill out a loan application with details about your income and debt. Using this information in combination with your credit report, your lender will determine how much you’re eligible to borrow, the interest rate and repayment terms.

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.

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.

An alternative way of financing a car bought through a private sale is with a personal loan. 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 seller.

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.