Key Issues In Private Party Auto Loans

Auto loan for private party are used for availing a used car from a source other than the dealer. This means there is a buyer, a seller and a lender. The source of the car is usually a friend or relative, but at times it could be an unknown advertiser from the newspaper. The process of private party auto loan is not as simple as it seems to be.

Some of the issues that can complicate the transaction are as follows.

1. The rate of interest is a bit on the higher side. Unlike the normal duration of repayment, this loan has to be repaid within 48 months. The more you pay as monthly payment, the faster you get rid of the loan. There are lenders who offer private party auto financing for candidate with bad credit too, but the terms and conditions need to be thoroughly studied and analyzed.

2. The dealer is not involved in the purchase of used car through private party car loans. If the private party from whom you are buying the car is a relative or friend, the source can be said to be trustworthy. What if the source is some unknown whom you came across through the advertisement in the newspaper? Is this source trustworthy? It is in these kinds of situations that you could be fooled into buying a clunker. The counter measure for this is availing the services of a reliable, experienced and profession automobile expert who can tell you about the overall wear and tear of the car and its real value.

3. One of the most confusing issues in private party auto loan could be the transfer of title. If the private party source does not have a pending loan on the car then the title transfer becomes easy, but if there is a pending loan the matter could be complicated. The lender of the seller and that of the buyer have to sort out the financial matters and transferring of the loan. The lender of the seller may want the first loan to be fully repaid or may allow the rest of the monthly installments to be paid by the new buyer. The transfer of the loan may be charged or may not be charged.

The above issues if properly thought of and studied can make the process of private party guaranteed car financing very simple and easy. The above point can also make the transactions and transfer of the title easy.