Scouting the private seller market for a car provides a wide range of options; some even you didn't know could come that cheap. But the thrill of the hunt can fade when you discover the limited availability of private-party auto loans. Despite their scarcity, they are the only tailored financing option should you decide to finance a car from a private seller instead of buying it outright, which is often the case, unlike dealership cars, which are easier to finance. Sure, you might have all the cash you need, but spreading out the cost of the car over time makes it more affordable and helps you avoid being financially insecure. Additionally, you can afford a better car since you can safely spend more than you initially budget. More about the advantages of car financing in a later discussion. What are some of the major benefits of private-party auto loans?
Private-party auto loans offer several key benefits that make them attractive financing options for buying a car from a private seller. Firstly, it assists in buying a car from the private seller car market, whose sellers often have lower prices than dealerships, allowing you to save money by avoiding dealership fees and markups. Plus, unlike a dealer auto loan that might limit you to a certain dealership, you can buy from any seller, hence flexibility in car selection. One key benefit is that a private-party auto loan will, in most cases, be cheaper than its alternative, a personal loan, which tends to have higher interest rates. Last but certainly not least, private-party auto loans pose more risk to lenders as the car acts as collateral for the loan. Thus, lenders sometimes offer expert advice and guidance on specific cars, providing a level of protection for you as the borrower and car owner. Besides that, some lenders offer additional services such as extended warranties and auto insurance.
There are several important details to take into account before taking out a private-party auto loan, but here's a breakdown of the three that matter most:
Lenders rely on your credit history to assess your risk as a borrower. A strong credit score increases your chances of getting approved for a private-party auto loan and makes a better case for better loan terms. On the other hand, a bad credit score does the opposite.
Unlike a personal loan and most dealer auto loans, lenders also consider the car you're purchasing when applying for a private-party auto loan. Approval might be based on specific criteria such as the car's age, value, condition, and mileage.
Before you settle on a lender out of fear that you won't find another one offering private-party auto loans, take the time to shop around and compare. Look beyond just the loan terms. Check for qualities like minimum and maximum loan amounts, whether they offer prequalification or approval, discounts on interest rates, and any additional services they provide.
Yes, you can get a private-party auto loan from UMB Bank. However the bank describes it as a personal auto loan to finance a car from a private seller or dealership. So, it might be similar to a standard personal loan but may not offer the same level of flexibility. UMB Bank provides financing options for recreational vehicles as well.
Opting for a private-party auto loan presents several advantages that make it a smart choice for purchasing a vehicle from a private seller. But before committing to one, it's wise to consider factors such as your credit history, the car you want to buy, and terms offered by different lenders. This ensures you find a loan that not only meets your financial needs but also provides peace of mind throughout the loan term.
Exotic Car Trader is the fastest growing marketplace built specifically for automotive enthusiasts. Click below to learn how you can sell your car with us.
LEARN MORE
