Difference Between Private To Person Car Loans And Dealership Car Loans

Difference Between Private To Person Car Loans And Dealership Car Loans

There are many advantages when a person buys a used car directly for a private owner, especially when the car history is known to the purchaser first hand. Hence, there is very little chances of facing unpleasant surprises about the car later on. Also, cutting the middle man out (ie. the used car dealer) you invariably end up getting a better deal. And you need not worry about getting yourself a car loan either. There are abundant numbers of bank and even online financial institutions that will help you with these types of Private Auto Financing.

In fact many of these online companies also give what is known as Guaranteed Car Loans They also guide people who have had declared bankruptcy in the past to get car loans, these are also referred as Bad Credit Bankruptcy Car loans. And if a person is regular with payments of the installments to these new loans, they are assured to have improved their credit scores considerably.

Person to person car loans or non dealership loans have similar processes to that of a dealership car loan, but there a few differences that you should be aware of while going for one. Some of them are listed below:

Higher interest rate

Usually the interest rate for Private Auto Financing is higher by points compared to traditional loans of new car financing and one and a half higher than cars purchased from used car dealerships.

Installment schedules

New car financing can have a standard repayment period of six years or seventy two months. However in private Auto Finance Specialist usually allow a repayment period up to four years (forty eight months). This means that the installments to be paid every month will be much higher. But this is not necessarily a bad thing as you will be paying a cheaper total interest value and you need not worry about a situation in future wherein the total amount you owe for the car is more than the value of the car itself.

Taxes and other fees

Usually at dealerships the dealer may give you an option of combining the taxes, title and registration fees into the loan amount. However, with private car loan this option is not available. And you have to pay these taxes and charges separately.

Title transfer period

In private car transaction the title transfer may not be an instantaneous process. Delays may especially occur if there exists dues of a previous auto loan on that car. And this delay may be even more if the lender is not a local institution.

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