How to Buy a Car From a Private Seller With a Loan

Are you looking to buy a car from a private seller rather than going through a car dealership? Have you found a car online you really want, but is being sold by an individual? If so, then you need to learn how to buy a car from a private seller.

There’s a trick to the trade. When you buy a used car from a private seller, you want to make sure everything checks out. That includes checking up on the private party, checking a vehicle history report, and so on.

See below for an in-depth guide on how to buy a car from a private seller with a loan. You can also use the information below in case of financial assistance for car repairs. As many car repair services work in partnership with online lending companies, they typically allow you to pay for repair works with a loan. Be sure to use this information to your advantage.

  1. Look for Cars In Your Area

If you’re looking to buy a car online from a private party, you aren’t alone. In fact, many people use this technique instead of going through a car dealership. Doing so can give such benefits as:

  • Lower the price you pay for the car
  • Avoid the contingencies and technicalities a dealership might have
  • Level the playing field between you and the private party to negotiate the price
  • Lower the time it takes to buy the car
  • Create a straightforward car sale process

Of course, all of these benefits rely on you finding a reputable private seller to purchase from. But more on that in a moment!

First, you want to invest time in researching cars in your area. You can search and buy a car online through different sites, some of which are more trustworthy than others.

If you find an offer that seems too good to be true, look up the resale value of that car’s make, model, and year online. If the seller’s asking price excessively lower than the resale value, that should raise a red flag in your mind.

  1. Look Up the VIN Number

Any time you find a car that you might be interested in buying, you should look up the car’s VIN for more information on its history. It doesn’t matter whether the car is being sold through a private party, dealership, or anywhere else.

We recommend that you use reputable VIN sites as:

  • Carfax – a well-known and trusted site, but the cost for the report is very high
  • EpicVIN – a relatively new site, but there is more information in its report than in reports from Carfax
  • VINinspect – provides the reasonably accurate vehicle information in their reports
  • VINgurus – their reports contain all photographs of vehicles from previous sales

Using these incredible sites, you can look up any car and get an elaborate report on its history. That includes getting information on things such as the car’s:

  • Mileage
  • Number of Accidents
  • Odometer Reading
  • Safety Recalls
  • Sales History
  • Number of Owners
  • Ownership History
  • Vehicle Details
  • Repair History
  • Junk, Salvage, and Insurance Records
  • Title History

The list goes on and on. This gives you a thorough analysis of where the car has been before and whether it’s worth the investment. If there are any red flags on it, the car credit report will shine a light on it.

This information can help you make an informed buying decision. Before you go through the process of investing in a loan, you need to make sure the car is worth the investment. Otherwise, you’ll be committing yourself to a loan on a car that won’t last.

  1. Search for Eligibility

You might not qualify to receive a loan through every lender. The lender might have limitations and standards for things like:

  • Your Credit Score
  • Your Income Level
  • The Down Payment You’re Offering
  • Your Age
  • The Price of the Car
  • The Mileage of the Car
  • How Old the Car is & more

That’s why it’s important to shop for a car before you shop for a loan if you’re looking to buy a car through a private party. Lenders want to know about the car you intend to buy, the history of it, and whether it’s a risky purchase in their eyes.

Fortunately, this process has never been easier. Simply go online and visit different auto loan lender sites to see if you’re eligible for their loans. If you don’t need to fund the entire purchase with a loan, you can also consider a short-term borrowing option to supplement your current savings.

Note: If you intend to pay with cash, then you do not have to seek the approval of a loan lender to buy from a private party.

  1. Shop Around and Compare

Of course, you should never take the first loan offer that’s given to you. You want to make sure you’re committing to an auto loan provider that’s interested in helping you, not filling their own pockets.

Be sure to get at least 2 to 3 different offers, if you can. Be sure to look at things such as the APR they’ve offered, monthly payment amounts, loan amount, loan term (preferably 60 months), potential penalties, etc.

Choose the loan that makes the most sense for your situation. Remember, your goal should always be to pay off the loan before its term to avoid paying more interest than needed.

  1. Finalize the Sale

Now that you have the loan you need, it’s time to wrap things up in a beautiful bow with your private party selling the car. But you’re not out of the woods just yet.

Be sure to ask for all of the proper documentation, such as:

  • The title of the car
  • Bill of the sale
  • Odometer check

Don’t be afraid to negotiate the price. If you’ve been pre-approved for a lesser amount than the private party’s initial asking price, it may give you leverage to lower the cost.

How to Buy a Car From a Private Seller: Follow the Correct Steps

Now that you’ve seen an in-depth guide highlighting how to buy a car from a private seller, it’s time to trust the process!

Start with step one. Search for cars around town and see if there are any that are worth your time. You may find that going through a dealership is ultimately the best choice for you, but it never hurts to look!

Be sure to browse our website for more articles on buying used cars, as well as many other helpful topics you’ll enjoy.