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!

Written by 
Thomas Perrotta
Thomas Perrotta is the managing editor of Savvy. Throughout his time at the company, Thomas has specialised in personal finance, namely car, personal and small loans, although he has also written on topics ranging from mortgages to business loans to banking and more. Thomas graduated from the University of Adelaide with a Bachelor of Media, majoring in journalism, and has previously had his work published in The Advertiser.
Our authors
, updated on July 3rd, 2024       

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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 40 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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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. It is also worth taking the car for a test drive to get a feel for how it handles.
  • 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.

How do I know how much a car is worth?

Whether you're buying or selling a used car, you'll want to get a good deal. There are a number of factors that determine a car's value. These can include:

  • Age and distance driven: as a general rule, the older the car and the more kilometres driven, the lower its worth will be. High-usage cars typically have more wear and tear, reducing their market appeal.
  • Make and model: some car brands and models are known for their reliability, performance and popularity, making them more sought after in the used car market.
  • Condition of the vehicle: cars with minimal wear and tear are likely to fetch a higher price compared to those with visible damage or mechanical issues.
  • Repair history: even if a car is in good working condition now, a history of significant repairs can negatively impact its value. For example, a car that was previously written off is likely to be less valuable than one with a clean history.
  • Service history: a car that has been regularly serviced is more likely to attract a greater price than one that hasn’t as it reassurance of the car's reliability and condition.
  • Market demand and seasonality: high demand for specific car models can drive up their value, particularly if they’re in short supply. Additionally, factors like the time of year can affect car prices.
  • Upgrades and features: certain upgrades and additional features, including safety features, can increase a car's value as they are more appealing to buyers.
  • Location: car values can vary depending on your location within Australia. Factors like local demand and availability in your state, city or town can influence car prices. 

To help you estimate the value of a car, many websites and car valuation platforms offer free online tools that allow you to enter your car's details, such as make, model, year, mileage and condition. These tools use algorithms and market data to provide you with an estimated value. Keep in mind, however, that while these tools can give you a rough idea, they may not consider all specific factors that could affect your car's worth.

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 do I sell a car privately while it’s still under finance?

If you want to sell your car but haven't finished paying off your loan, these are the steps you can take:

  • Speak with your lender: before you begin the process of selling your car, reach out to your lender to discuss your situation. This will help you determine whether you’ll have to pay off the loan in full before selling the car or if you’re able to have the buyer pay your lender instead. They’ll provide you with a payout figure, which is the amount required to pay off your debt, inclusive of interest and potential fees.
  • Assess the car's value: research the current market value of your car. You can use online platforms, car valuation tools or seek guidance from professionals. Understanding your car's worth will help you set a reasonable selling price which takes the outstanding finance into account and helps ensure you receive a fair deal.
  • Communicate with the buyer: it’s essential to be transparent with potential buyers about the outstanding finance. Inform them of the situation and what your intention is with the remaining debt, bearing in mind they’ll be able to check if your car is under finance.
  • Complete the sale: once you have a buyer and the agreed-upon payment, work with them to arrange the sale. This will involve either you having already paid this amount out to the lender or arranging for the seller to transfer the funds to them directly.
  • Transfer ownership of the car: after the outstanding finance is settled, you can proceed with transferring ownership to the buyer. You’ll need to complete a Notice of Disposal form and any other required documentation through the relevant state or territory authority. This ensures the change of ownership is properly recorded.

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.

Why choose Savvy?

Further answers about loans for private sale cars

Will a private sale affect my interest rate?

Used cars may come at slightly higher interest rates than new ones from a dealership. The fact that they’re being sold privately also means that rates may be higher, as the potential quality control is lower than at a dealership. However, this won't always be the case, so it's important  to check with your lender to see how your choice of car may affect your rate. Your Savvy consultant will do that for you during the application process.

Am I able to buy a car of any age from a private seller with finance?

When you apply with Savvy, we can help arrange for cars up to 20 to 25 years of age to be financed by one of our flexible lenders. Alternatively, if you want a car even older than this, we can help you arrange an unsecured personal loan to finance the vehicle instead.

Can I get a loan for a car purchased at a private sale for my business?

Yes – as long as your car meets your lender's criteria relating to age and condition and that you use it at least 50% of the time for business purposes, you can opt for a chattel mortgage and buy the car for your business.

Can Savvy help me access bad credit loans for private seller cars?

Yes – we can help you access bad credit car finance through our lenders. It’s important to note that loans of this nature come with higher interest rates and greater restrictions on the amount you’re able to borrow due to the level of risk associated with a lower credit score.

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