What Are The Requirements For Private Party Auto Loans?

By Author: Jeff Collins
Total Articles: 71
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The private party auto loans are very similar to dealer auto loans. There are only basic differences between these two types. When a person arrives at dealership, everything is right before him during the sale purpose. Purchasing a new or used auto from a private owner needs one to go through all the steps independently. Below given article will explain the difference between a private party auto loan and a dealer loan.

Interest Rates

The interest rate can differ from 1-2% higher. It also depends on the payment history, whether a person has a cosigner or not, his personal credit score and it also include all the items like the length of the employment and income level. The higher the credit score, the lower would be the interest rate offered. If a person can easily get approval for a dealer loan, than for him a private party auto loan is easy.

Length of Loan

A dealer loan is usually 72 month loan whereas a private party auto loan is no longer than 48 months, with this short term and high interest rates, the monthly payments is higher than a dealer loan but actually one would be paying ...
... less interest rate overall for the auto finance. If any one can afford high monthly payments than its good for him to select a short term loan because the interest rate on those term would less.

Down Payment

It's not necessary that one should have a down payment while availing private party auto loan, even auto loans with no down payment will do. Usually dealers ask one to place some amount of down payment on the new vehicles unless one has outstanding credit score. With private party auto loans, down payments are not necessary but they are always recommended. It's a good practice to keep 20% amount as down payment on the total price of the auto loan. This will reduce the loan amount of the car and it will reduce the overall loan amount.

Tax, Tag and Title

One needs to pay for and apply for the title, tax and tag for the auto. This cost is not included in the private party car loans. A dealer loan has the ability to roll all these additional cost in the loan amount. A private party car loan is just for the car price only and nothing more can figure nor will it be figured into the loan price. Thus one should be prepared to cover the additional upfront cost.