Thinking about buying a car from a friend, neighbor, or someone you found on Facebook Marketplace or Craigslist? Smart move! Buying from a private seller can often get you a better deal than going through a dealership. And the best part? You don’t have to pay all cash upfront—thanks to something called a private party auto loan.
Let’s break it down.
💡 What’s a Private Party Auto Loan?
It’s a loan that helps you buy a car directly from another person—not a dealership. It allows you to access a broader range of vehicle options and potentially negotiate a lower purchase price than you might find at a dealership.
🏦 Why Start with a Credit Union?
Here’s the deal: credit unions are often your best bet when it comes to auto loans—especially for private party purchases. Why?- They typically offer lower interest rates than banks or online lenders.
- They’re member-focused, which means they’re more likely to work with you to find a loan that fits your budget.
- You’ll get personalized service from people who actually care about helping you—not just closing a deal.
If you’re working with a credit union like Excite, you’ll get competitive rates and real people to guide you through the process.
🛠️ How It Works—Step by Step
1. Start with Your Credit Union
Before you start browsing listings, check in with your credit union. Some offer pre-approval so you know your budget ahead of time. Others might want full details on the car—like the VIN, mileage, and title status—before they can move forward.
✅ Pro tip: Ask what documents you’ll need upfront so you’re not scrambling later.
2. Find Your Ride
Not every car qualifies for financing, so make sure the one you’re eyeing checks the boxes. Credit unions usually look at:
- Age and mileage of the car
- Mechanical condition (you might need an vehicle and smog inspection)
- Whether the title is clean or if there’s still a loan on it
- Minimum loan amount
✅ Check the car’s value on sites like Kelley Blue Book—your loan amount will likely be based on that, not just the seller’s asking price.
3. Gather Your Docs
Once you’ve found “the one,” it’s time to collect the paperwork:
- Proof of income and any financial info your lender needs
- Car details: VIN, make, model, mileage, condition
- Seller’s title and registration
- Payoff letter (if the seller still owes money on the car)
- A signed bill of sale or purchase agreement
✅ Your credit union can help you figure out what’s needed—and don’t forget to check your state’s DMV site for local requirements.
4. Apply for the Loan
Submit your docs and let the credit union do their thing. They’ll review the car and your financials to make sure everything checks out. If an inspection or payoff is involved, it might take a little longer.
✅ Build in some buffer time so you’re not rushing at the last minute.
5. Get Insurance
Before the loan is finalized, you’ll need full-coverage auto insurance. Your credit union will need to be listed as the lienholder, and they might have rules about your deductible.
✅ Ask about insurance requirements early so you’re ready to go.
6. Get Funded
Once you’re approved, the credit union will send payment—either directly to the seller or to their lender if there’s still a loan on the car. Sometimes the check is made out to both you and the seller, or it might be sent to you to hand over.
✅ Confirm how payment will be handled so you and the seller are on the same page.
7. Register the Car and Transfer the Title
After the money changes hands, work with your credit union to ensure that the car is registered and that the title has been transferred with your state’s DMV. Don’t forget to list the credit union as the lienholder.
✅ Expect to pay sales tax, registration fees, and maybe an emissions test fee. Your DMV’s website will have all the details.
🚘 Let Excite Credit Union Help You Drive Away Happy
At Excite, we make it easy to finance your next car—your way. Whether you’re buying from a buddy or someone you found online, we’ll walk you through the process with great rates and friendly service. No stress, no surprises—just the keys to your next adventure.
Let’s get you behind the wheel!
