Private sale car finance: how it works

Buying a car from a private seller can save you money, and you can still finance it. Private sale finance works a lot like buying from a dealer, but there are a few extra steps because there's no dealer handling the paperwork.

Step 1: Talk to us before you start shopping

Sorting out your finance first helps you understand your budget, so you can look at the right cars and negotiate with confidence. Some lenders can give you an approval subject to conditions before you've found the car, which then gets finalised once you have.

Step 2: Find the car and gather the details

Once you've found the one, the lender will need:

• The seller's name and contact details
• The car's make, model, year and kilometres
• The registration number and VIN
• The price you've agreed with the seller

Step 3: The lender checks the car

Because there's no dealer involved, the lender protects both of you with a few checks:

• A PPSR search. The Personal Property Securities Register shows whether there's money owing on the car, and whether it has been recorded as written off or stolen. You can also search it yourself for a small fee.
• Ownership. The lender confirms the seller is the registered owner and has the right to sell.
• Sometimes an inspection or valuation. This makes sure the price is in line with what the car is worth.

Step 4: Settlement

Once the loan is approved and the paperwork is signed, the lender usually pays the seller directly rather than giving you the money. If the seller still owes money on the car, the lender may pay out that finance first, so the car is clear when it becomes yours.

Many lenders need comprehensive insurance in place before settlement, so organise that as soon as your approval comes through. After settlement, transfer the registration into your name.

Tips for a smooth private sale

• Wait for approval before paying a deposit. That way you're not out of pocket if something changes.
• Check the paperwork. Make sure the name on the registration matches the seller's ID.
• Have the car inspected. A mechanic's inspection can pick up problems before you commit.
• Check the registration is current. And note when it's due for renewal.

How we can help

We arrange private sale car finance and handle the lender's checks with you, so you can focus on finding the right car. Read more about our car loans, or start a car loan quote. Enquiring with us has no impact on your credit score.