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How do I buy a car from a private party with a loan?

On my route to work, there's this car for sale in someone's yard. I currently carpool with my grandpa, but I've been saving up for a car. My credit is okay—not great, but not bad—and I think I can make a pretty good down payment. But I'll need a loan to cover the rest. How do I get a loan to buy a car from an individual?

avatar
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You can buy a car from a private party with a loan pretty much the same way you would buy a car with a loan from a dealership.
The main differences are the interest rate might be higher and the loan term may be shorter. Lenders view private party vehicle purchases as riskier than deals done through a dealership, so this is how they mitigate some of that risk.
Before applying for the loan, check your credit score. If it’s less than 660, you may need to find a friend or family member with a better credit score to cosign on the loan in order to get approved.
Another way to up your approval odds is to make a significant down payment. If you can put down 20% of the sticker price, it will help.
Before you buy the car you saw, make sure you have
car insurance
. It’s illegal to drive without it, even if it’s just off the seller’s lawn.
You can get car insurance fast, like 45 seconds fast, with the
Jerry
app. Jerry will compare 50+ top insurance companies, like Nationwide, Allstate, Safeco, Progressive, and Travelers, to help you get the coverage you want and at a price you can afford.
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