Car Loans for Private Sales

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Can you get a car loan for private sale vehicles? Yes, you absolutely can.

Some people associate car loans and finance with new cars from dealerships, but a car loan can help you purchase a lot more.

We explain how and why car loans for private sale vehicles work and how you can benefit.

Quick questions answered

  • Where do you find private sale cars?

Answer: typically online, for example Facebook Marketplace, or even family or friends who might be selling a vehicle.

  • Can you buy older cars with a car loan?

Answer: yes, but some car loan products have limits on the age of a vehicle. In this case, some people opt for a personal loan to buy the car.

  • Where does the money come from?

Answer: the same lenders (like banks) that all car loans come from. Car loans for vehicles from dealers and private sellers operate very similarly.

How car loans for private sale vehicles work

Usually, a borrower will have an idea of the car (or cars) they are looking at as well as the amount they’ll need.

For example, this might be an SUV from Toyota, Ford or Mazda and require roughly $30,000 along with the trade-in value of a current vehicle.

The car loan applicant goes through a simple pre-approval process where a broker assesses their circumstances and finds the best options with the best rates from a range of lenders.

Of course, the $30,000 is readjusted when we know the exact amount needed so it pays to get the best deal on used cars.

Upon finding a vehicle from a private seller and agreeing on a price, the buyer usually pays a deposit in order for the seller to hold or reserve the car until all the payment has been made. This is often negotiated between the seller and buyer.

The buyer’s broker contacts the seller and gets their banking information and arranges with the lender to have the funds transferred to the seller. Sometimes, the buyer pays for the car from two sources, a sale of a previous vehicle and the car loan.

A pre-approval is a key ingredient in car loans for private sale vehicles

With flexible pre-approved car finance, you can shop around armed with the knowledge of exactly what you can afford and when you find the right vehicle, you have the funds to seal the deal all ready to go.

You can go car shopping online and in person from both dealers and private sellers. You can even buy vehicles from interstate with a car loan.

A pre-approval can potentially stay in place for up to 90 days before you’ll have to reapply, however, most people find a car during this time.

That’s great news for anyone looking to keep their options open.


  • To work out what you can afford, you might try using a car finance calculator to get an estimate and compare numbers.
  • A credit report (credit file) is crucial for determining your interest rate. Using a broker can dramatically increase your chances of approval and decrease impacts to your credit file
  • If you’re not 100% confident in inspecting a vehicle from a private seller, consider paying for an inspection. This means a qualified vehicle inspector will give the car a thorough shake down and list anything wrong with it. Some also provide ballpark estimates on any repairs needed.

Why take out a car loan for private sale vehicles?

There are a few reasons why buying a car from a private seller can really be advantageous.

- More choice

The main reason to look at vehicles offered by private sellers is simply the increased range. There are thousands of people selling cars online at any given time so having that range to look at can really help.

- Low pressure

Generally speaking, car dealers are there to sell cars and often do what they can to accomplish as much. Most private sellers apply less pressure to prospective buyers.

- Insight knowledge

Private sellers who have lived with the vehicles they’re selling can offer more insight, assuming they’re honest that is. They may divulge quirks or other history of the vehicle that dealers don’t know of.

- Negotiating power

Depending on the person selling the car, you can often get a good deal on vehicles sold by private sellers. For example, you might find someone moving interstate or even overseas or otherwise keen to sell the vehicle quickly.

Protecting your purchase

When you buy a vehicle with a car loan, you’ll need comprehensive insurance. A broker can help with this as it’s part of their job.

This means when you pick your car up, it’s fully insured from the start. Insurance doesn't need to break the bank, in most cases you can include this into the car loan itself.

A broker can also assist with additional options for things like:

  • Extended warranties
  • Tyre and rim insurance
  • Loan protection (reduces the financial burden on you if you happen to fall sick or are unable to make payments on your car loan and protects your credit rating by preventing defaults)

You can compare quotes and select your cover to commence on the day you pick your car up, giving you complete confidence and peace of mind.

Car loans for private sale vehicles in summary

Using finance through a broker to purchase a used private-sale car can be a smooth process, taking out any stress or pressure you may receive at a dealership.

A finance broker might even be able to help you search for the car you are looking for, and will guide you step-by-step through the loan and purchase process.

Reach out to the Positive team even if just to check your options. There are no obligations to simply find out.

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