You have watched longingly as your neighbor pulled out their beautiful BMW from their driveway time and time again. Suddenly, you notice it is parked by the curb with a “For Sale” sign in the windshield. Your heart skips a beat.
More and more often people are using situations like these to find a used vehicle rather than paying the inflated costs of a used car dealer. Whether the car was a neighbor’s, a cousin’s or an awesome Craigslist find, the person searching has discovered the car they want at a desirable price.
Now the only problem is paying for it. If you do not have the cash on hand to buy a used vehicle from its owner, you can often seek out private party loans. These loans offer the means to purchase vehicles from people who are not official dealers. Keep in mind that some special conditions may apply, but often with some simple paperwork, you can make your neighbor’s beauty yours without having to pawn off your furniture to do it.
Is It a Good Buy?
A car that is washed and waxed can look gorgeous, but in all likelihood you are not buying it for display. In other words, you will want to make sure that the vehicle is a solid investment. After all, some people may be trying to get rid of their car for a good reason. The last thing you want is for them to make their headache yours.
Ask around to see if the owner has voiced any sort of red flags to friends, family or acquaintances. Request to see its service records to find out if the owner kept up with preventative maintenance and to also see if they had any major repairs.
You should have a trusted mechanic evaluate the car to see how well it will run and whether or not it has any impending problems that could pop up in the near future. Compare the asking price of the vehicle to its market value based on mileage and condition using a tool like Kelly Blue Book. Finally, use the vehicle’s VIN number to request a vehicle report from a site like Carfax or VehicleCheck.
Typical Private Party Loan Requirements
Once you decide that the car is truly worth buying, you are going to have to establish if you can qualify for a private party loan. Most private party auto loans require:
- The applicant to be at least 18 years old
- The vehicle to be six years old or less
- The total mileage to be 80,000 or less
- The minimum balance to be $7,500
- The loan duration to be less than 48 months (4 years)
- A down payment
- A clean title
- An official bill of sale
Keep in mind that because these car loans are higher risk for auto lenders, they may charge higher interest and demand more documentation than usual, such as proof of employment and income statements. You can often lessen the strict requirements by providing a more ample down payment.
The good news is that with enough searching, you can find the perfect lender to handle your private party auto loan, even if it is a bad credit car loan. Pretty soon that stunning BMW can turn heads pulling out of your driveway instead of your neighbor’s.