Car Purchase: Financing For Private Sale?

[Crazy Flamer]

So I've been looking at getting a new vehicle and since my credit isn't the greatest, I've been thinking I will have to go to a dealership to get financing. I may have a co signer to lower the interest rate, but even with a co signer, I'm not sure a conventional financial institution would finance me.

But for the particular vehicle I am looking at, better deals can be found through a private sale. I know there are dealers that will finance almost anyone, although at a higher interest rate. Is this sort of financing available for private sales as well?

[drewboy12]

co signer for a line of credit, cheaper interest rate.

[kipperfan]

Originally Posted by Crazy Flamer

So I've been looking at getting a new vehicle and since my credit isn't the greatest, I've been thinking I will have to go to a dealership to get financing. I may have a co signer to lower the interest rate, but even with a co signer, I'm not sure a conventional financial institution would finance me.

But for the particular vehicle I am looking at, better deals can be found through a private sale. I know there are dealers that will finance almost anyone, although at a higher interest rate. Is this sort of financing available for private sales as well?

I could be wrong, and someone please correct me if I am, but to the best of my understanding, if your co-signor has an extremely good credit rating as well as assets to protect the financial institutions investment, you should be able to get the financing regardless of your personal credit rating.

And I don't believe there would be any avenue to finance a private sale except through a bank with a loan/credit line, which you would again need the co-signor for (might be your best option though). You might be able to find some small institution out there that would give you a high interest loan, but the interest and terms would not be worth your while.

[Deegee]

Originally Posted by drewboy12

co signer for a line of credit, cheaper interest rate.

This works for very few people.

Most people max out the line of credit and sit paying interest only.

Most people need the structured loan.

For the record, our used car loan rates are lower then our unsecured line of credit rates because one is repaid and secured with an asset when the other is not repaid nor is it secured.

Originally Posted by kipperfan

I could be wrong, and someone please correct me if I am, but to the best of my understanding, if your co-signor has an extremely good credit rating as well as assets to protect the financial institutions investment, you should be able to get the financing regardless of your personal credit rating.

And I don't believe there would be any avenue to finance a private sale except through a bank with a loan/credit line, which you would again need the co-signor for (might be your best option though). You might be able to find some small institution out there that would give you a high interest loan, but the interest and terms would not be worth your while.

This is correct. If you need a cosigner, then the loan is a joint debt that is granted based on the "cosigner's" credit worthiness.

As for the original poster, it would be interesting to see how bad your credit really is. I have seen several people who allegedly have bad credit, but actually okay to lend to. If you have no credit, which is different then bad credit, then you can ask utility companies to write you letters stating you have made payments as agreed and hopefully your financial institution will accept that as a credit history. I know our Credit Union would.

Hope that helps.

[Champion]

Originally Posted by Deegee

This works for very few people.

Most people max out the line of credit and sit paying interest only.

Most people need the structured loan.

For the record, our used car loan rates are lower then our unsecured line of credit rates because one is repaid and secured with an asset when the other is not repaid nor is it secured.



This is correct. If you need a cosigner, then the loan is a joint debt that is granted based on the "cosigner's" credit worthiness.

As for the original poster, it would be interesting to see how bad your credit really is. I have seen several people who allegedly have bad credit, but actually okay to lend to. If you have no credit, which is different then bad credit, then you can ask utility companies to write you letters stating you have made payments as agreed and hopefully your financial institution will accept that as a credit history. I know our Credit Union would.

Hope that helps.

Not to get too off topic, what is considered bad credit? Something under 650?

[Deegee]

Originally Posted by Champion

Not to get too off topic, what is considered bad credit? Something under 650?

Scores don't mean everything. I've seen scores that are fine in the 571 range because of a slow payment on Sears (who are picky) and I've seen people with a score of 790 who I wouldn't dare lend to.

[DownhillGoat]

One note about co-signing, it won't help to build your credit rating, as the co-signer is essentially responsible for the loan.

Instead of assuming you have to go through the dealership, why not go to your bank and find out if you qualify or not? Do you actually know your credit is bad? Or are you just assuming? Or do you have a lack of credit?

However if you're getting a new vehicle, you may be able to get a much lower interest rate (Ford and IIRC a few others have 0% right now - you won't get that at a bank). I was able to qualify for an entry level vehicle as a relatively broke university student years ago.

Most companies should have an application online to see if you qualify. It's not going to hurt to give it a shot.

Originally Posted by Crazy Flamer

I know there are dealers that will finance almost anyone, although at a higher interest rate. Is this sort of financing available for private sales as well?

There's certainly institutions out there that will gouge you interest to give you money for a private sale, sure. At that point you may want to decide if you're willing to give away money for nothing (interest) or hold off on getting a new car until you build your credit. There's nothing wrong with picking up a model that's a few years old that's still in great shape that someone else has eaten the depreciation on already.

Originally Posted by Crazy Flamer

I know there are dealers that will finance almost anyone, although at a higher interest rate. Is this sort of financing available for private sales as well?

There's certainly institutions out there that will gouge you interest to give you money for a private sale, sure. At that point you may want to decide if you're willing to give away money for nothing (interest) or hold off on getting a new car until you build your credit. There's nothing wrong with picking up a model that's a few years old that's still in great shape that someone else has eaten the depreciation on already.