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Wellby Financial

How to Finance a Car When Buying from a Private Seller

November 27, 2023

By Team Wellby

What You'll Need When Financing a Car from a Private Seller

Unlike buying a house, when purchasing a new car, financing is typically secured after the buyer and seller have already agreed to the deal. While financing can often be handled internally if you buy from a dealership, buying a car from a private seller is a different story. You will need to carefully navigate the process to secure financing for a car being sold by an individual owner or non-dealership business.

Fortunately, we can make the private seller auto loan process much easier. Let's remove the guesswork and explore what you'll need to successfully finance a private vehicle purchase.


finding your dream car online.pngFinding the Car You Want to Purchase

The first step is to research and find the right car to purchase. If you are just starting on the search for a new car, try a few private seller platforms like AutoTrader where you can find a wide range of vehicles that will fit your needs. Sources like these can sometimes offer better prices and a more interesting selection than buying from a used dealership.

Shop around for the ideal vehicle among private sellers. Look for a vehicle that matches your style, size, and performance needs. There are many reasons to buy from a private seller, whether you're looking for the best price on a good commuter vehicle, a work vehicle with proven performance, or even a modified vehicle with specific upgrades.

Once you have chosen your ideal car and found a seller, begin a flow of communication and negotiate a final purchase price. It’s important to know the car’s actual market value from third parties, such as Kelley Blue Book. Determine any negotiating points by asking about the seller’s circumstances for selling the car, having a mechanic determine any immediate repair costs, or if there is any original equipment missing as these can justify reducing the price.

There are certain details you’ll need to provide about the car you’ll need to submit when applying for a private seller car loan. Therefore, you'll need to gather these details before your submitting your financing application.

Request that they send you all of the vehicle details including:

  • Year
  • Make
  • Model
  • Vehicle Identification Number
  • Odometer Mileage
  • Repairs Needed
  • Vehicle History
  • Blue Book Value
  • Modifications

You should also ask if the seller is willing to hold the vehicle for you. This will give you time to apply for financing, prepare auto insurance details for the loan’s approval, and read up on the process registering the car in your name. Most private sellers will agree to hold the vehicle because they know buyers must secure financing with a detailed application, including the car’s details as long as constant communication is happening between them and a potential buyer.

Determine Eligibility and Gain Pre-Approval

Once you and your seller are working together, it's time to contact a lending specialist. You can do this online, over the phone, or by visiting a local branch to discuss financing options. Wellby has several branch locations throughout the Houston area, along with helpful support channels to suit your preferences so you can start this process immediately.

Speaking with a lending specialist, you can share the details of the vehicle, and your lending specialist will help you determine loan eligibility. Once you’ve been preapproved, you can work with your lending specialist to determine the right balance of monthly payments, term length, and other loan specifics to secure a loan that neatly fits into your personal budget.

Applying For Your Private Sale Car Financing

applying for private sale auto loan.pngNow that you are approved for a car loan, you’re ready to dive into the application process. Applying for an auto loan can seem intimidating, but with the proper documents prepared before you apply, you can get behind the wheel of your new car in no time.

All you need is some reference information, a few important documents, and our loan specialists to guide you through the whole process from start to finish. Start by collecting the documents you will need ahead of time to expedite the process and to ensure you don’t keep the seller waiting to long. As mentioned, many sellers will understand the need to give you time to acquire the necessary funding, but impatience can lead them to sell the car while waiting.

When applying for a car loan, you’ll typically need proof of identity, income, credit history, residence, and insurance. You may also need to be prepared to prove that you have a down payment ready, either by check or bank statement.

Here is a quick list of items you should bring with you in case they’re needed.

  • Driver's License, passport, or other government issued photo ID - Proof of Identity
  • Pay Stubs or Tax Returns - Proof of Income
  • A Utility Bill - Proof of Residency
  • Vehicle Identification Number
  • Insurance Policy - Proof of Insurance
  • Down Payment - Check or Bank Transfer paperwork

With your papers in-hand, you are ready to submit your private seller auto loan application. If you're not sure about any of the details, don't worry. A Wellby loan specialist will be with you every step of the way. They are there to assist in answering questions and to reduce the stress of this typically tedious process. You will find the loan application much less stressful with someone ready to help.

Close on Your Loan and Enjoy Your New Vehicle

closing-on-private-sale-auto-loan_v2.pngAs soon as your loan is approved, you will be contacted by your loan specialist to congratulate you and help you prepare to buy your car. Take the approved loan back to your vehicle seller and close the deal. Your seller will be able to receive payment via the loan while you can receive the vehicle's title and paperwork.

Be sure that the vehicle is registered in the state where you live, either by transferring the current registration to your name or by registering the vehicle when you arrive in your state. When this is done, you can enjoy your new vehicle ownership with complete success and freedom.

Vehicle Loans to Fit Your Budget

If you’re ready to get on the road or set sail, we’re ready to help you take the next step toward your dream vehicle.

Borrow Wisely
Blog Article
Auto/Vehicle
About the Author

Team Wellby is a diverse team that is here to help you find the right financial solutions for your unique goals and budget. Our passion is people: our members, team members, and the communities we serve. We help people find solutions that support their financial well-being, allowing them to dream and prosper.

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