Car buyers with good credit can buy a vehicle from practically any seller they want, but if you have bad credit, getting financed for a private party loan, or any place other than a licensed dealer, can be very difficult.

Private Party Car Loan Questions

Here at Auto Credit Express we frequently are contacted by borrowers with bad credit asking if we are able to arrange a loan so that they can buy a vehicle from a private party. Here's a message we received just last month:

"I would like to know if I can get a loan for a car that is being sold by a private owner, not a dealership. Thank you."

The short answer to this would be "no." But here are the reasons why.

Private Party Car Loans

private partyTo begin with, Auto Credit Express is not a lender, that's not what we do. The service we offer matches buyers with less than perfect credit to dealers in their area that work with credit-challenged borrowers. These dealers are signed up with subprime lenders. These lenders consider other factors in addition to an applicant's credit score and look for ways to approve them for a car loan.

Secondly, these subprime lenders – the ones that offer car loans to people who have bad credit - typically only work through licensed car dealers.

Here's why:

  • Because these loans come with a higher risk of default (because they're offered to buyers with poor credit), subprime lenders typically require the dealer, who acts as their representative, to verify a borrower's income, job and residence. This is done to make sure the buyer can afford the loan. It also is a way of making sure that the information the borrower entered on the application is correct.
  • These subprime lenders also require dealers to verify that the vehicle being financed is what the paperwork says it is. In other words, the dealer must correctly describe the vehicle’s age and mileage, how it's equipped (sunroof, automatic transmission, power windows, etc.), as well as the type of title it has. The last point is especially important, because these lenders will not finance any vehicle with a branded title (rebuilt, flood damage, mileage unknown, etc.).

So it's clear that a licensed car dealer is an important part of the subprime car loan process. It's also easy to see why these lenders wouldn't want to take on any more risk by offering private party loans directly to consumers without a third party (in this case, the dealer) to verify this information.

The Bottom Line

Because of the increased risks, credit-challenged borrowers usually won't find a lender willing to finance a vehicle purchase from a private party.

Instead, if you have bad credit and need a vehicle, we want you to know that, for nearly 20 years, Auto Credit Express has been helping buyers with credit problems get the auto financing they need.

Not only do we make the process simple, charging nothing for the service with no obligations, we also have a nationwide network of dealerships that are qualified to work with unique credit situations.

So go ahead and fill out our simple and secure online car loan request to get started today.