Private party auto loan?

"area man" (hurrburgring)
08/18/2016 at 15:26 • Filed to: None

I’m trying to buy a $5K car by the end of the year without draining my savings so I have some coin to make inevitable repairs. If I end up buying from a private seller, what's the best place to go for a loan? I have pretty good credit.

DISCUSSION (25)

RamblinRover Luxury-Yacht > area man
08/18/2016 at 15:28

Your bank very possibly has personal lines of credit or personal loans in that range for very reasonable terms. There are also outfits that specialize in this kind of thing only, but I don’t have any direct experience with them.

jimz > area man
08/18/2016 at 15:29

do you qualify for membership to a credit union? they tend to treat their members well.

Sn210 > area man
08/18/2016 at 15:30

I’d say your local credit union, but depending on the year of the car, you might not be able to get an auto loan. You might have to go the personal loan route, which will come with a higher interest rate.

area man > jimz
08/18/2016 at 15:32

I’ve heard that, but I have no idea how to join one. It’s different from opening a regular bank account right

area man > RamblinRover Luxury-Yacht
08/18/2016 at 15:33

Didn't think about regular ol personal loans, thanks

bhtooefr > area man
08/18/2016 at 15:35

There are two differences that I’m aware of.

At least my credit union requires that a certain amount be held as the membership fee - $25 of my share (savings) account is inaccessible unless I close the account.

And, credit unions have some limitations on membership. Mine is for anyone who lives, works, or worships in the county that I live and work in. Others are for employees (and family members thereof) of a certain company. There’s other variations.

Otherwise, it’s pretty much just like opening a bank account.

BeaterGT > area man
08/18/2016 at 15:36

Usually have to live in the area/meet some requirement or can pay $5+ to join. As Sn210 said, you probably will not be able to get an auto loan and will have to spring for a higher interest rate personal loan.

area man > bhtooefr
08/18/2016 at 15:36

Thanks!

Battery Tender Unnecessary > area man
08/18/2016 at 15:37

How old is the car? Some won’t loan if it’s too old or the rates will be higher than an equivalent new car’s.

Textured Soy Protein > area man
08/18/2016 at 15:39

I don’t have any personal experience with them, but LightStream does pretty decent rates on private party auto loans .

area man > Battery Tender Unnecessary
08/18/2016 at 15:39

Interesting. I don't have a target in mind yet but all the cross shopping I've done this summer has been stuff ranging from 1980-2000.

Funktheduck > area man
08/18/2016 at 15:49

For a car in that price range it's likely too old for a bank/credit union to do a car loan. You may qualify for a personal loan. Credit unions almost always have better rates. When I went for my car the credit union offered me 1.69% and the next closest from a bank was 1.99%. The dealership wound up matching my credit union which wound up be a big plus for me because by the time the deal finished it was almost 7 pm on a Friday and everything was closed. I would've had to come back which would've been a big pain.

ttyymmnn > RamblinRover Luxury-Yacht
08/18/2016 at 15:51

I may be mistaken, but I believe some banks put restrictions on what the money from a personal loan can be used for. I have hazy recollections of trying to finance some house repairs in unconventional ways.

Honeybunchesofgoats > area man
08/18/2016 at 15:53

One thing to keep in mind is that a personal loan is going to have 2-3 times higher APR than an auto loan. But you're also probably not going to get an auto loan for a car that's at least 16 years old.

Chris_K_F drives an FR-Slow > area man
08/18/2016 at 15:53

Like most people have said, credit union is the way to go.

I financed my FR-S through the credit union at my dad’s company. Also, if you have anyone in your direct family that’s currently or has previously been in the military, you can sign up with USAA. I bank with them, and their auto loans are supposed to be pretty solid.

Matt Nichelson > area man
08/18/2016 at 15:55

If ya have any other questions about credit unions aside from whay the others said, I work at one so I will be happy to help!

area man > Matt Nichelson
08/18/2016 at 16:01

Oh awesome, thanks! I'll definitely reach out later

RamblinRover Luxury-Yacht > ttyymmnn
08/18/2016 at 16:04

I know my bank breaks it out a bunch of ways. “Major purchases”, is one. I’m pretty sure buying a car was exactly one of the okayed items under a category.

ttyymmnn > RamblinRover Luxury-Yacht
08/18/2016 at 16:05

To be sure, all banks are different. We use a credit union.

WiscoProud > area man
08/18/2016 at 16:08

For that old I would look at credit unions. Most banks want to securitize the loans, and thus won't loan against vehicles that are that old.

Mid Engine > area man
08/18/2016 at 16:54

https://www.firsttechfed.com/loans/vehicle_…

2.69%

Monkey B > area man
08/18/2016 at 17:18

I needed money in a pinch and got a loan from the crowd sourced lender Prosper

area man > Monkey B
08/18/2016 at 18:05

good experience?

Monkey B > area man
08/18/2016 at 18:10

no complaints here. IIRC there is a small fee in the beginning, but it’s been a few years and I don’t remember exactly what it was. Paid off early and there were none and no issues with the automatic payments. I’d use them again.

Monkey B > Monkey B
08/18/2016 at 18:11

BTW, In my experience unsecured loans are the hardest to get.