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Private Party Auto Loan

While some people believe that auto financing only exists for vehicles purchased from a dealership, lenders also provide loans for buyers purchasing a vehicle from private sellers. Nationwide offers auto loans for vehicle purchases from private parties. If you would like to apply for a private party auto loan, the application is available here.

Common questions about private party auto loans

If you've never purchased a car from a private seller, you may have a few questions about the purchasing and financing process.

For instance: 

If you aren't planning to pay the entire cost of the vehicle up-front, one of the most pressing questions you'll need to answer is how you're going to finance the transaction. 

Securing a private party auto loan

Whether you’re beginning your search for a used car with a strict budget in mind or you’ve already verbally agreed with a seller on a price, you’re probably going to need financing for your vehicle purchase. Getting pre-approved for a loan allows you to determine your loan amount, interest rate, and payment before you begin shopping. Pre-approval is quick and easy, but once you’re pre-approved, you’ll wonder how you go from pre-approval to using your loan to secure the vehicle. 

Below, we’ve listed many of the steps commonly involved in the purchase and financing process for buying from a private seller:

You may want to begin by using an online loan calculator to get a feel for a loan scenario (loan amount, term, and interest rate) that leaves you with a payment you're comfortable with.

Complete an auto loan pre-approval application for the loan amount you've calculated. Applications can be accessed from a qualified lender. If you've applied for a Nationwide auto loan via online, you may receive the pre-approval in as few as 15 minutes and the confirmation will be emailed to you.

Find a vehicle and agree to a sale price with the seller. Many states require that the buyer and seller document the purchase agreement with a state-specific bill of sale.1 Check your state's BMV or DMV website to find a list of requirements to complete a private sale.2,3  Even if your state doesn't require a signed agreement other than the title transfer, it is generally a good idea to document the transaction with a bill of sale. These contracts can protect both the buyer and seller in a private-party transaction.

Once you signed the loan documents with the lender for the exact amount that you'll be borrowing, follow the appropriate instructions from your lender for transferring the funds to your seller. Sometimes, the lender will send the loan amount to a bank account of your choice, and you simply pay from that account. For digital banking services, Like Nationwide's, the lender may provide a funding code by email that you can give to the seller so he or she can receive payment directly from the bank.

After the seller receives the payment, you’ll need to meet with a notary or at a BMV, DMV, or title agency to complete the title transfer. The seller will need to complete the title assignment and, in many states, note the current mileage for the vehicle on an odometer statement (sometimes found on the back of the title). If the seller has a loan on the vehicle, you may need to ask him or her to call the bank holding the loan and arrange a meeting at the bank to complete the title transfer. If this can’t be arranged, the seller will need to ask his or her bank how to proceed.

Take the assigned title and your driver’s license to the BMV, DMV, or title agency and purchase your license plates and register the vehicle. You will also probably need to pay the sales tax for the purchase. In some cases you may be required to provide an E-Check inspection certificate or exemption to obtain your registration.

Mail the assigned title to your bank. The bank will return a memorandum title, which you should keep as proof of ownership until your loan is paid off.

Laws and vehicle title transfer procedures vary from state to state, so if you’re thinking of purchasing a vehicle from a private party, you’ll want to review information published by your state DMV, BMV, or title agency about the process.

We’ve collected information for all 50 states’ title transfer procedures here:  Just make sure that you confirm all the information.

Information on completing a vehicle sale between private parties

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To learn more about auto loan preapproval, read more here and start your application today!

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