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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?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
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!View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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