A private party car loan also known as person to person car loan can be a best way to buy your cars without spending much. This type of car loan allows you to finance the car you would like to purchase from either friends, relatives or by neighbors. However, there are strict norms and conditions to be followed in private party car loans. It is important to remember that it is still a loan and to be repaid with proper interest rates in a fixed time.
The loan tenure would be usually less when compared to a loan from any of the dealers. The tenure might extend to a maximum of 4 years in case of private seller auto loans. Hence, you must understand that it is always better to repay fast as you will have to shell out extra money in terms of interest. Moreover, there are norms on the mileage, age of vehicle etc.
The interest rates are usually higher in this case. Normally, the interest rates would be 2% high when compared to the industry standards. It proves to be an unsecured loan in most of the cases which leads to a higher interest rate.
Private party car loans or third party car loans do not require any kind of down payment in most of the cases. However, it is highly recommended to have 25% of the price to pay as upfront payment to reduce the interest rates and the loan period. Otherwise, you end up paying more than the worth of the car.
Make sure that you combine the taxable amount, registration fees and all other extra expenditure in the loan amount to avoid any hassle. As some private auto lender do not allow this to be included. Hence, you must be ready to spend out of your pocket for such expenses.
It takes as long as 2 weeks to display your name in the title that comes in the official deal. This is due to the significant delay in the completion of the payoff process.
It is always recommended to check the condition of the car and clear title before buying through private auto sale. They might not be your friends always. As many a time people go by reading an advertisement. However, it is important to extract the best out of such deals. There are several service agents available who can help you getting a good car loan deal through an individual seller according to your requirements.
The entire process can be made hassle free by the use of online applications available in the internet. You need not put a strain on your budget limits. Some of the private party auto financing lenders will never bother about your poor credit ratings. People who find it difficult to make lump sum upfront fees can make use of this opportunity to drive their dream wheels. The applicant must be employed and should be minimum 18 years completed. Proper verification and back ground check on the documents submitted will be carried out before approving the loan.
Notice latest news:
October 20, 2009
Loan Approvals Backsliding, Says CNW
After months of improvement, the share of auto loans being approved has begun to backslide, according to CNW Marketing Research.
Approval of all loan applications from prime shoppers reached 88.9 percent in June and rose to 91.7 percent in August. But approvals declined in September to 88.4 percent, and continued to drop in the first two weeks of October to 86.2 percent, wrote CNW’s Art Spinella.
Similar patterns of decline were seen in the near prime and subprime categories.
Excluding leases and personal loans, customers being financed through a dealership or financial institution hit a high water mark in August at 84.7 percent for prime and 71.6 percent for near prime, according to Spinella.
Subprime borrowers have seen declines in loan approvals for five consecutive months since June. More than third of the rejections can be traced to consumers who recently entered the market with poorer FICO scores and believed they could get an auto loan. However, the other two-thirds of subprime borrower rejections would have been approved in August.