Guide to Private Car Sales Finance

Guide to Private Car Sales Finance

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Navigate the minefield of private car sales finance

Positive Lending Solutions have access to numerous loan options to equip you to buy a car through private sale finance or use a private car sales loan. With a flexible pre-approved car finance, you can shop around armed with the knowledge of exactly what you can afford. We can even ensure that your pre-approved loan can be used at either a dealer or in a private sale.

You might not be able to find the car that you want through a dealership. Or you might find the right car for a better price in from a private seller. It may even be that you have your heart set on a Green car, when the dealer only has a Red one.

If you haven't found the car you're going to buy yet, you want to keep your options open so that wherever you find your ideal car, whether through a private sale or at a dealership, you have the funds to seal the deal all ready to go. To work out what you can afford, you might try using a car finance calculator to get an estimate.

A car finance broker can arrange pre-approval for a loan from a choice of lenders who offer flexible finance that can be used in either case.

Why a private car sales?

Firstly, buying a second hand car makes sense. A new car loses thousands of dollars in value the moment you drive away from the dealership. But a pre-owned car depreciates more slowly.If you buy a car that is one to two years old, you’re making a significant saving, and still getting a car with low km’s.

A second hand car will have more authoritative reviews published. You can fully research what you need, and be confident that the car you select does what you expect it to, reliably. Why? because hundreds of people have already road-tested that model.

While a dealer is out to push the sale, a private seller is more likely to tell you about the little quirks they’ve noticed while they’ve owned the car.

private car finance be careful

A good finance broker will also have the option of helping with vehicle sourcing - a process where the broker searches and negotiates for the vehicle on your behalf, potentially saving you thousands on the car purchase.

6 Things You Should Do When Buying Car Privately

  1. Have a budget Make sure it allows for insurance, regular maintenance and running costs.
  2. Compare Prices to make sure that you’re paying a fair price for the make, model and mileage of the car you’re considering.
  3. Research Cars and read expert reviews to discover what the best car for you is. If you want a current model, find out when the next model comes out. Once it does, your dream car will probably drop in price. Often after some research, people realise that the car they initially thought they wanted isn’t quite right for them after all, and decide on a different model and make.
  4. Ask questions Don’t be afraid to ask lots of questions to reveal as much detail as possible about the history of the car:
    • How long has the seller owned the car?
    • Why are they selling it?
    • Has it ever been damaged or been in an accident?
    • Has it had any major repairs done?
    • Where did they buy it?
    • When was the timing belt changed?
    While selecting a new vehicle, one crucial consideration is whether it is safe. You can find comprehensive information about the safety ratings of cars available in Australia here.
  5. Double check The car’s mileage and history. You can expect that the car will have done around 20,000 km for each year since the car was brand new. If possible, get your mechanic to have a look over the car to make sure you aren’t purchasing hidden costs.
  6. When you check the car yourself, some things to look for include:

    • Look at the car in full daylight - this way you won’t miss any body marks, dents or rust.
    • Check the oil level- if it’s high there’s a better chance the previous owner was conscientious and the car has been well-maintained. Check for any oil marks underneath the car.
    • If there’s a white substance around the oil filler cap, you could be up for an expensive repair of the head gasket.
    • Look underneath the car along it’s length from each front wheel. If the front and rear wheels aren’t directly aligned, it means that the chassis is twisted - the car might have been in a crash.
    • Check the tyres for wear
  7. Test Drive the car along roads you are familiar with. Start the car with a cold engine to check for smoke. Listen and feel to make sure the car runs smoothly.

Found the car you want? Negotiate for the best price:

With a pre-approved car loan you already know exactly how much you can afford. And you’ve done your research, so you know exactly what the car is worth.

When you find a car you like, you can get your car finance broker to call ahead to negotiate the price and confirm that the car falls within the criteria of your pre-approved loan. Your broker will make sure that you get a fair price, and the seller’s best price.

Then you can go a test drive the car without having to stress about negotiations - you can focus on the drive.

After viewing the car and taking a test drive, if you’ve found ‘the one’ then the next step is to call your car finance broker and arrange your finance.

Your broker will let you know what the lender needs to put the private car sales finance contract in place. The paperwork will include:

  • Roadworthy Certificate
  • Inspection Report from an independent company (this is for identification purposes only) - this can be done by RAA, RACV, Ultratune, Repco, Midas or somewhere similar.
  • Photographs of the car - from all angles - front, back, inside, odometer, engine plate.
  • Current registration papers
  • Proof of Identity and Banking details of the seller

Alternatively some businesses exist to assist in the search for a vehicle such as Used Cars Adelaide. These businesses will do the hunting, negotiating and checks like mechanical & PPSR searches for you

Before the private car sale loan contract is commenced, the broker will perform a complimentary Personal Property Securities Register Check to ensure you take clear title to the car.

Protecting your Purchase

When you arrange your car finance through a broker, you can get advice on the appropriate insurance at the same time. This means when you pick up your car, 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.

car insurance doesnt need to break the bank

Your finance broker can provide you with quotes depending on the type of car you’ve purchased, for:

  • comprehensive car insurance
    • covers you for the value of your car at the time that damage occurs
  • 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. This protects your credit rating by preventing defaults.

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

Final point on private car sales finance

Using finance through a broker to purchase a second hand car in a private sale can be a smooth process, taking out any stress or pressure you may receive at a dealership. A finance broker might even be able to help you search for the car you are looking for, and will guide you step-by-step through the loan and purchase process.

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