Buying privately can open up more used-car choices, but the finance process is different from buying through a licensed dealer.
The lender needs confidence that the seller owns the vehicle, the asset is acceptable security and settlement will leave the lender with a valid interest in the car.
Vehicle and ownership checks
Expect the lender or broker to ask for identifying details such as registration, VIN, make, model, year and purchase price. Additional checks may be required depending on the lender.
A PPSR search is also important when checking whether a vehicle is recorded as encumbered, written off or stolen.
What if the seller still owes money on the car?
The transaction may still be possible, but settlement generally needs to deal with the existing financier correctly. Do not assume the seller can simply take your money and clear the old finance later.
Older cars can narrow the lender pool
Vehicle-age rules vary. A car that is acceptable to one lender may be outside another lender's policy, particularly once the age at the end of the proposed loan term is considered.
Have the deal details ready
The fastest first check usually starts with the vehicle, agreed price, seller type, amount required and your basic financial position.
Buying privately? Check the finance path before you pay the seller.
About the author: KK Neelamraju is a finance and credit professional and an Authorised Credit Representative through GPS Finance Group.
GPS Finance Group (CRN 000575797) is an Authorised Credit Representative of AFAS Group Pty Ltd (ACL 414426). AFCA Member ID 119860. General information only. Credit approval, pricing, timing and vehicle eligibility are subject to lender assessment.
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