Buying a car from a private seller has indistinguishable benefits, but a cash flow roadblock often ruins things. Unlike dealerships that have multiple financing options, there's not much out there that caters to private car buyers. Sure, you can take a personal loan and top up what you have, but the best way to finance a private seller car is by taking a private party auto loan from a bank or a credit union. However, due to the risk that private-party auto loans pose to lenders, they are relatively difficult to secure and not commonly offered. We'll cover what a private party auto loan is and how it works in a bit but in brief, it's a type of loan tailored for private seller car purchases in the same way a dealership loan is used to buy dealership cars. Does Bank of America offer private-party auto loans?
Bank of America is one of many banks that do not offer private-party auto loans. Like most banks, it only provides dealer purchase auto loans, refinancing for current auto loans, and lease buyouts for when you decide to purchase your leased vehicle. However, their dealer purchase auto loan has a distinct advantage: you can shop for a car and apply online, eliminating the need to visit the bank in person. The cars you shop for come from the bank's accredited dealers, which can sometimes lead to better loan terms and deals on the car due to the existing relationship between the bank and the dealers.
Unlike personal or leisure loans that can be used for various purposes and dealer auto loans intended for purchasing cars from dealerships, private-party auto loans are specifically designed to finance cars bought directly from owner-sellers (private sellers). If not handed over to a consignment company, cars sold through consignment also fall under privately sold cars. At Exotic Car Trader, all our listings are from private sellers, meaning you can use a private-party auto loan to buy from us. To get a private-party auto loan, you typically need to meet certain criteria set by the lender, which often include a review of your credit score, income, and the specific details of the car. Some lenders require you to have a particular car in mind before applying for a private-party auto loan, while others may allow pre-approval without a chosen vehicle. Once approved, the lender disburses the funds to the seller, and the seller transfers the title to the lender. You then make regular payments to the lender until the loan is paid off, at which point the title is transferred to you.
Traditional auto loans typically offer a streamlined process where the lender works directly with the dealership to handle paperwork and financing. Private-party auto loans, on the other hand, involve more legwork for you. You'll need to find the car first (but not in all cases), negotiate with the seller, and then secure loan approval from a lender who considers the car's condition and value before finalizing the loan. This extra step can be a slight hurdle, but the potential for lower purchase prices and unique finds in the private seller market makes private-party auto loans a compelling option for many car buyers.
Private-party auto loans are designed to help you purchase cars directly from private sellers, providing advantages like lower purchase prices and making it easier to buy from a private seller when you're short on cash. The alternatives, personal loans, usually come with higher interest rates, and dealer auto loans restrict you to specific dealerships. So, why not take advantage of a private-party auto loan?
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