Cars are a big investment, and with prices soaring, you may be wondering if it is possible to get a loan for the car you’re buying privately. A car loan for a private sale can make upgrading your car much easier financially, but what are the rules when it comes to loans for a private sale?
We have taken a look at the facts to find out how to get a car loan for a private sale. Check out the information below to find out more.
What is a Private Sale?
The private sale of a car is when someone buys a used car from a private seller. This means that rather than going to a car dealership to browse their selection, you would seek out private sellers on sites like AutoTrader.ca, or in newspapers.
Upgrading your car through a private sale is an easy way to replace your old car. You can seek out the exact car you want and will likely save money.
Loans for a Private Auto Sale
In Canada, it is possible to get a car loan for a private sale.
Some lenders offer this kind of loan. They can be both secured and unsecured loans and have varying interest rates. For example, older cars will have higher rates because their resale value is more likely to decrease over time. Like with other kinds of loans, rates may be fixed or variable depending on the lender and your credit score
How to Get a Car Loan for a Private Sale
You can get car loans in a variety of places, including from banks, credit unions, and other financial institutions, as well as lenders who work specifically with loans for private car purchases.
The steps to get a car loan for a private sale mimic those of being granted a personal loan. This means your credit history is likely to be checked and a higher credit score will offer better rates.. They will also look at other aspects of your financial situation, like income, as well as the condition of the car. There is usually an age limit on these loans too.
Private car loans usually have higher interest rates and shorter maximum payback time periods compared with those you are offered through a car dealership. However, you may be able to find better rates if you shop around with a number of lenders, and can often find lenders willing to give you a loan even with bad credit.
Other Options
Whether you have been rejected for a loan for a private sale, or you just want to know what your options are, there are a few you can choose from. We have examined them briefly below.
-
Personal loans
– Getting a personal loan is another way you could finance a car upgrade. Lenders generally don’t restrict what you can use your personal loan for and securing your loan with collateral will help you to get a lower interest rate.
-
Using a line of credit
– You could also consider borrowing from a line of credit. You will be approved to borrow up to a certain limit and must make monthly repayments to pay the money back. Be aware that without a repayment deadline, you may be tempted to spend more of the credit on other things, but you will still have to pay it back regardless of whether you have spent more than you originally planned to.
Looking for a Car Loan for a Private Sale? Get in Touch With Car Loan Masters Today!
Car loans for private sales can be a little more difficult to get than other types of loans, but with Car Loan Masters, you can have a loan approved in less than 20 minutes. To find out more about our car loan services and how to get a car loan for a private sale with us, get in touch today.