Private Sale Car Loans
Find the best car finance offer available for your private purchase with Savvy. Access competitive rates and flexible borrowing options with us today!
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Buying a used car from a private sale is a great way to save money on your vehicle purchase and your car loan as a result. With competitive rates and flexible terms available whether you’re looking to buy for yourself or your business, Savvy can help you compare a range of options to narrow down private sale car loan.
At Savvy, we’re partnered with a wide range of over 25 diverse lenders that cater to your needs. All it takes to get started is a quick quote on our site, which will only take you a matter of minutes to complete, and you can have your application off and running today.
Can I get a loan for a car purchased through a private sale?
Yes – you may be able to finance a car bought from a private seller, provided the vehicle satisfies your lender’s requirements. Whether you’re buying privately or through a dealership, the lender's income and overall profile requirements for you are the same.
However, a private sale car loan may require you to conduct more checks and sign a few more documents when it comes to finalising the deal. This is so the lender can ensure the car is fit to serve as collateral for your loan.
When it comes to used cars, plenty of people prefer to purchase via private sales, as they provide buyers more room to negotiate. Negotiating a significant discount on a used car at a dealership can be harder, as they have many overheads, such as rent, employee salaries, franchise fees and more.
These fees do not apply to private vendors. They may also be willing to compromise on the car price to get the sale done as soon as possible, whereas a dealer usually can’t discount further than a certain level.
How can I get a private sale car loan?
The process of applying for a car loan for your private sale vehicle is as follows:
- Compare your options: before you start signing off on any loans, comparing your available options is crucial. This will help you find the best available rates, fees, terms and features, as well as help you determine which lenders may be able to finance the car you’re looking at.
- Submit your application: next, you’ll need to apply to a lender. This can be done either directly to a lender or via a car finance broker, who can help with this process.
- Provide required documents: you’ll need to submit some documents alongside this, such as proof of income (payslips or bank statements), a valid ID and a consent form, as well as documents and information related to the car you’re looking to buy if you’ve already found it.
- Search for your car: once you receive conditional approval, you can start looking for cars within your budget if you haven’t already decided on one. Be mindful of your lender’s vehicle eligibility criteria, such as for its age and condition.
- Receive formal approval and sign your contract: after you decide on your car and your lender approves it, you can submit your formal application to finance the vehicle and await approval. Once you receive it, you can sign your loan documents and await funding. When you apply through Savvy, you can have the work done for you by your trusted consultant.
What checks should I conduct before buying a car from a private sale?
There are several areas you should check before agreeing to buy your car from a private seller. These include:
- PPSR check: checking the Personal Property Securities Register (PPSR) will tell you whether the car you wish to buy is still under finance and if it’s been written off or stolen in the past. This can be done for $2.
- Independent inspection: although you should always check the vehicle yourself, hiring a mechanic to conduct an independent inspection is a great way to look for any issues or inadequate repairs.
- Car history report: another way to unearth details about the car is to purchase a report into its history. This can include a PPSR check, as well as provide information on prior sales listings, car safety and an estimate of its value. There are several private companies who offer this service for a fee.
What can I do if my private sale car is still under finance?
It’s still possible to get a car loan for a vehicle which has outstanding finance. There are two main options for what to do in this situation:
Pay out the loan first
Your vendor can pay out the loan first if they have enough funds, which will save both of you time and effort in the handover process. However, if your vendor isn’t in a position to pay out the loan before the sale, they’ll need to provide a payout letter.
Provide a payout letter
Your vendor will need to provide a payout letter, as obtained from their lender. The payout letter should include details such as the outstanding balance on the loan, its due date and the bank details of the seller’s lender.
If your vendor supplies you with this letter, you can pass it onto your lender, who can pay the portion of the loan needed to pay off the outstanding debt directly to their lender. Any amount above this will be paid to your vendor.
However, if your vendor’s loan amount is greater than the agreed purchase price of the vehicle, they’re responsible for paying out the difference to their lender. This isn’t your responsibility unless agreed upon with your vendor.
How much will my private sale car loan cost?
There are several variables which can impact the cost of your car loan, including the following:
- Interest rates: perhaps the most important factor in the cost of your loan, lower rates will result in greater savings.
- Fees: on top of interest, establishment, ongoing and early and late payment fees can all add up over your loan.
- Loan term: the longer you choose to take to repay your loan, the more interest you’ll pay.
- Loan amount: interest is calculated based on the outstanding loan amount, so larger sums will attract more interest.
- Early repayments: if you manage to pay off your car loan early, you can save on interest and fees (provided you aren’t charged early payment fees to do so).
- Balloon payment: by attaching a balloon payment to your loan, you can reduce your monthly repayments, but doing so will increase the overall cost of your loan.
The following table demonstrates how repayments can vary in cost based on different interest rates and loan sizes:
| Loan size | 7.00% p.a. | 8.00% p.a. | 9.00% p.a. | 10.00% p.a. |
|---|---|---|---|---|
|
$30,000 |
$594 |
$608 |
$623 |
$637 |
|
$40,000 |
$792 |
$811 |
$830 |
$850 |
|
$50,000 |
$990 |
$1,014 |
$1,038 |
$1,062 |
|
$60,000 |
$1,188 |
$1,217 |
$1,246 |
$1,275 |
|
$70,000 |
$1,386 |
$1,419 |
$1,453 |
$1,487 |
Source: Car Finance with Instant Approval Online – Savvy. Repayments are calculated based on a five-year term and monthly instalments.
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