How to Get a Loan When Buying a Car From a Private Seller in PA

How to Get a Loan When Buying a Car From a Private Seller in PA

While you need to go to a car dealership to purchase a new car, you can opt to buy from a private seller if you want a used vehicle. Each year, many such deals go through in Pennsylvania, and the process isn’t as complicated as you may think.

You’ll need to take care of some of the legwork on your own, though, such as executing a title transfer and getting a vehicle history report. You’ll also need to secure your own financing as opposed to having the option of going through a dealership’s financing department.

Are you considering this route for your next car purchase? Here’s a useful guide on how to get a loan when buying a car from a private seller.

Determining the Price of the Vehicle

First, you’ll need to make sure you’re paying a fair price for your vehicle. Not only do you not want to overpay, but you may have trouble securing a loan if you agree to pay too much.

Financial institutions may have different limits on how much financing they’ll provide for a used car. At PSECU, for instance, we offer loans for up to 100% of the retail value for a used car based on Kelley Blue Book® (KBB) or other authorized guide’s value, as long as the car has a minimum value of $3,000. This means that if KBB determines the retail value of your chosen car as $10,000, but the buyer wants $11,000, you’ll only be able to finance $10,000 with our auto loan rates.

You may still secure a loan from PSECU, but you’ll have to pay a higher interest rate if you’re financing it for more than 100% of its retail value. However, PSECU will not finance a used vehicle for more than 130% of its KBB value.

If you want to avoid the higher interest rate, you can negotiate your way to a better price, walk away from a possible deal if the seller won’t come down, or decide to pay the price above its retail value out of pocket. No matter what, though, if you can’t purchase the vehicle up front or secure financing, the deal won’t go through.


Other Things to Ask the Seller

Before you begin the process of applying for the loan, you’ll want to ask the seller about:

  • The vehicle’s service records
  • An opportunity to have a mechanic of your choice inspect the car
  • The registration, to ensure the name matches the seller’s
  • The vehicle identification number, so you can do an online check on the vehicle’s history

Do You Need to Get Prequalified for a Car Loan if Buying From a Private Seller?

Before shopping for your car, it’s important to get prequalified for a car loan so you know how much you can afford. When you purchase a car from a dealer, you can finance directly through the dealership, but you don’t have that option when you buy from a private seller. You’ll need to secure a loan through a financial institution.

You can apply for a vehicle loan from PSECU whether you’re buying a car through a dealership or a private seller. You can finance up to 120 months, depending on the price of the vehicle, though choosing a shorter loan term will typically give you a lower interest rate and save you money.

Give us a call to determine the best approach for your circumstances. The answer will depend on your current financial situation, your credit history, and how long you plan to take to repay the loan.

If you’re not a member of PSECU, you can join and get prequalified for your vehicle loan at the same time.

Remember that you’ll have a few additional steps left after you lock in your financing. Be sure to follow the rules set in place by the Pennsylvania Department of Motor Vehicles to ensure a legal transfer of the vehicle once you have the money lined up.

Securing a Vehicle History Report

Before purchasing a used vehicle, you should look up its vehicle history report to learn more about its condition. You’ll want to know if it’s been in any major accidents that could impact the life of the vehicle. To retrieve this information, you’ll either need the VIN or the license plate number when completing the vehicle history search on a site like AutoCheck®.

You may also want to fill out a request for vehicle information through PennDOT to confirm the car owner, make sure the mileage is correct, and to see if there are any liens against the car.

Ordering a Title Transfer in Pennsylvania

You’ll need to accompany the seller to the PennDOT office nearest you to order a title transfer. You should both bring a valid driver’s license. The seller should bring the title for the car, as well.

In front of a PennDOT agent, you’ll fill out your name and address on the back of the title. You’ll also sign it and give information on the lienholder, or loan lender, on the back of the title. Then you’ll need to pay for taxes and title fees, as well as provide proof of insurance. Be sure to call your insurance agent beforehand to secure this.

Secure Your PA Car Loan Today From PSECU

Buying a car from a private owner may allow you to find the car of your dreams. Contact PSECU today to learn more about your loan options when you buy from a private seller in PA.

Find additional tips on saving money, visit our WalletWorks page.

Kelley Blue Book® is a registered trademark of the Kelley Blue Book Co., Inc.

The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.