How do I get a car loan to buy from a private seller?

I want to buy a 2016 Ford Mustang from a private seller, but I need a car loan. How do I get a car loan for a private sale?

Answer
Getting a car loan for a private party vehicle is a common occurrence and one that can save you money compared to the more expensive cars at the dealership.
Since you already know what car you want, you should start by applying for pre-approval at multiple lenders. In a 14-day period, you can apply to as many lenders as you want and it will only count as a single hard inquiry against your credit score. This can help you avoid giant drops in your credit score while you search for a car loan.
Next, find the value of the Ford Mustang through a site like Edmunds or Kelley Blue Book. This should allow you to negotiate or settle on a price with the buyer.
Also, check if the car has a lien on it. If it does, you’ll have to do some extra paperwork so you won’t be liable for paying off the loan.
At the closing, the lender will do all the paperwork, especially if the seller has a lien or loan on the car. In this case, your lender will make the check out to the lienholder rather than the individual, which all but ensures that the seller uses the money to pay off the loan rather than taking the money and running.
At closing, you’re also going to need proof of insurance, which can get a bit pricey on a vehicle like a Mustang. That’s why you must look around on sites like Jerry to get the best rates. Jerry compares rates from more than 50 top providers, including Nationwide, Allstate, and Travelers, and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!
Eric Schad
Answered on Nov 23, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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