Private Sale Car Loan

Can You Get a Private Sale Car Loan?

Filed under Information Centre

Can you get a private sale car loan? Yes, you absolutely can.

Some people think that you can only get car loans for dealer vehicles - this is not true. You can get a loan to buy almost any vehicle in Australia. We explain.

Quick questions answered

  • What cars can you get finance (a loan) for?

Answer: any passenger or commercial vehicle that is designed for road use in Australia. This can be from a dealer or private seller (eg. someone on GumTree) and can be for new and used vehicles

  • What is a private sale car loan?

Answer: it’s a car loan to buy a car from a private seller (eg. someone on GumTree). Private sellers are different from dealers because they aren’t registered businesses but this doesn’t cause problems when taking out a private sale car loan

  • Where does the money come from?

Answer: the same lenders (like banks) that all car loans come from. Car loans for vehicles from dealers and private sellers operate very similarly.

  • What if the car is old (a classic) or a restoration project?

Answer: a personal loan is often an option for people looking at these kinds of vehicles

How a private sale car loan works


An applicant has an idea of the car (or types of cars) that suit their needs as well as the rough amount they’ll need.

For example, this might be an SUV from Toyota or a ute from Ford or Mazda sedan and require roughly $30,000.

  • Trade in or sell current vehicle: the applicant might decide to sell or trade in their current vehicle too


The applicant goes through a simple pre-approval process where a broker assesses their circumstances and finds the best options with the best rates from a range of lenders.

Of course, the $30,000 is readjusted when we know the exact amount needed so it pays to get the best deal on used cars.


Car shopping - this is usually a fun part. After getting pre-approval (confirmation of a loan amount from a lender), the applicant searches for that perfect vehicle. Usually GumTree and Facebook Marketplace are a great start.


Upon finding a vehicle from a private seller and agreeing on a price, the buyer usually pays a deposit in order for the seller to hold the car until all the payment has been made.

This is often negotiated between the seller and buyer.

Tip: if you pay a deposit on a vehicle, make sure you get a written receipt from the buyer


The buyer’s broker contacts the seller and gets their banking information and arranges to have the funds transferred to the seller.

*Funds are sent from the lender directly to the seller.

Sometimes, the buyer pays for the car from two sources, a sale of a previous vehicle and the car loan.

DONE: Congratulations! You’ve got your next car!

A pre-approval is a key ingredient in a private sale car loan

With flexible pre-approved car finance, you can shop around for cars armed with the knowledge of a confirmed budget.

In other words, a pre-approval means you have:

  • Told your broker that you’re looking for a car and the rough amount (eg. SUV, few years old, $30,000)
  • Submitted the necessary documents to your broker
  • Been matched to a lender and car loan product
  • Had the funds confirmed, pending finding an exact vehicle

All that’s left to do is tell your broker the details of the car you find (eg. registration number, year/make/model and agreed price).

Of course, you won’t have this information until you shake hands with a seller.

You can go car shopping online and in person from both dealers and private sellers. You can even buy vehicles from interstate with a car loan.

A pre-approval can potentially stay in place for up to 90 days before you’ll have to reapply, however, most people find a car within a week or two, well before the pre-approval expires.

That’s great news for anyone looking to keep their options open!


  • To work out what you can afford, you might try using a car finance calculator to get an estimate and compare numbers
  • A credit report (credit file) is crucial for determining your interest rate. Using a broker can dramatically increase your chances of approval and decrease impacts to your credit file
  • If you’re not 100% confident in inspecting a vehicle from a private seller, consider paying for an inspection. This means a qualified vehicle inspector will give the car a thorough shake down and list anything wrong with it. Some also provide ballpark estimates on any repairs needed

Why take out a private sale car loan?

There are a few reasons why buying a car from a private seller can really be advantageous.

- More choice

A big reason to look at vehicles offered by private sellers is simply the increased range. There are thousands of people selling cars online at any given time so having that range to look at can really help.

Make sure to scour online resources and don’t limit yourself to vehicles only in your local area - transporting cars is not as expensive as it might seem!

- Low pressure

Generally speaking, car dealers are there to sell cars and often do what they can to accomplish as much. Most private sellers apply less pressure to prospective buyers.

- Insight knowledge

Private sellers who have lived with the vehicles they’re selling can offer more insight, assuming they’re honest that is. They may divulge quirks or other history of the vehicle that dealers don’t know of.

- Negotiating power

Depending on the person selling the car, you can often get a good deal on vehicles sold by private sellers. For example, you might find someone moving interstate or even overseas or otherwise keen to sell the vehicle quickly.

Protecting your purchase

When you buy a vehicle with a car loan, you’ll need comprehensive insurance. You can not buy a vehicle with a car loan and only select third-party property or third-party property, fire and theft.

A broker can help with this as it’s part of their job.

This means when you pick your car up, it’s fully insured from the start. Insurance doesn't need to break the bank, in most cases you can include this into the car loan itself.

A broker can also assist with additional options for things like:

  • Extended warranties
  • Tyre and rim insurance
  • Loan protection (reduces the financial burden on you if you happen to fall sick or are unable to make payments on your car loan and protects your credit rating by preventing defaults)

You can compare quotes and select your cover to commence on the day you pick your car up, giving you complete confidence and peace of mind.

Insurance companies are more than familiar and ready to help people organising insurance before they know all the details of the vehicle.

Private sale car loans in summary

Using finance through a broker to purchase a used private-sale car can be a smooth process, taking out any stress or pressure you may receive at a dealership.

A Positive Lending Solutions finance broker can even help you search for the car you are looking for Australia wide, and will guide you step-by-step through the loan and purchase process.

Reach out to the Positive team even if just to check your options. There are no obligations to simply find out.

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