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How to buy a car from a private seller

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Buying a car privately, or from a private seller, offers great perks like better prices, a larger range of options, and more room to negotiate. A lot of car buyers also feel less pressure when dealing with private sellers compared to dealerships. 

If you’ve found your perfect car but it’s being sold privately, don’t fret! Here’s how to buy a used car privately: 

Step 1: Get your financing in order 

Ideally, you’ve done this step before you’ve started car shopping. Look at your current debt, income, and savings to see what type of car you can afford. In addition to the car’s sale price, consider maintenance, fuel, and insurance costs as well.  

If you don’t want to use up all your savings on a car purchase, you can always apply for a used car loan. These loans work like the typical car finance where lenders pay the seller on your behalf. You’ll pay the lender back the loaned amount plus interest every month, fortnight, or week until the end of your loan term. 

For easier budgeting, apply for a pre-approved car loan at loans.com.au. With a car loan pre-approval, you’ll have an estimate of the amount you can borrow. A pre-approved car loan also shows private sellers that you’re serious about buying and not simply window shopping. 

Step 2: Inspect the vehicle carefully 

No one wants to drive a lemon. Inspect the car carefully yourself. Don’t rely on the advertisement photos and the seller’s word. Even if they’re being completely honest about the state of the vehicle, it never hurts to double-check. Also, don’t forget to test drive it yourself to see how it handles.  

To ensure that a car is in good working condition, get a pre-purchase vehicle inspection. With a complete and comprehensive car inspection, you’ll know the safety, integrity, and actual condition of the car. The mechanic will check the engine, exterior, interior, wheels, brakes, and other important parts and features. 

The inspection also lets you know whether the vehicle has been properly maintained, has been in any serious accidents, what’s been repaired, and other vital information. The vehicle inspection includes reviewing the car’s logbook. 

Step 3: Check the car history report  

This is one of the most important steps when buying a car privately. Look up the vehicle identification number (VIN) to learn more about the car. Always check the Personal Property Security Register (PPSR). This helps ensure that the private seller is legitimate and avoids potential risks. A PPSR search tells you: 

  • If a car has security interest or still has money owed on it. 
  • Basic information about the car such as make, model, and colour. 
  • The written-off and stolen status. 

When you do a PPSR check, you’ll receive a search certificate which is a legal record of the results. You should also get a hold of the complete car history report which includes: 

  • Number of owners the vehicle has had 
  • Repair and maintenance history 
  • Odometer reading 
  • Title blemishes 

Since you’re buying a used car, getting as much information about the vehicle as possible is essential. This helps you determine if the car has any security interest issues or is in danger of being repossessed. As a buyer, it’s your responsibility to make sure that the car has not been stolen, written off, and registered. 

Step 4: Negotiate with the seller 

Now that you’ve done your due diligence on the vehicle, it’s time to negotiate with the seller. This doesn’t always refer to the price. If there were any concerns raised during the car inspection, talk to the seller on how to go about the repairs. Work out a deal with the seller, whether it’s fixing the issues or lowering the price to compensate.  

Stay firm and keep a cool head. Remember that you can always walk away. Sometimes, buyers feel obligated to go through with the purchase because of the time spent during the car buying process. But if you don’t like the final price or sale terms, find a better deal elsewhere. 

Also, understand that you don’t have as many consumer rights when buying from a private seller compared to a dealership or business. Usually, buyers don’t have any warranties, guarantees, or cool-off period where they can return the car when bought from a private seller. Take these limitations into consideration when negotiating with the seller. 

Step 5: Finalise everything 

Settle your car loan with the lender by providing the needed documents and information. At loans.com.au, our friendly lending specialist will help you through the whole loan application process making it as easy and stress-free as possible. 

When your loan is approved, the lender will pay out the seller on your behalf and you get to drive away with your new car! After, you’ll start making payments on your loan while enjoying all the perks of car ownership. 

Need a loan when buying a car privately? 

Get in touch with loans.com.au today by calling 13 10 90! Or you can check out our range of low interest used car loans

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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