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Car finance ›
Can you get car finance for a private sale?
Updated: Thursday, 8 February 2024
If you’re looking to buy your next car from a private seller, you might be wondering whether you can access finance to help cover the cost. Most car finance companies don’t offer this, as there are additional risks when buying from a private seller compared to a dealership.
If you’re looking to buy your next car from a private seller, you might be wondering whether you can access finance to help cover the cost. Most car finance companies don’t offer this, as there are additional risks when buying from a private seller compared to a dealership.
Why don’t companies finance privately sold cars?
Moneybarn will only enter into a car finance agreement once we are satisfied that you, the seller, and the vehicle you want to buy fully meet our lending and dealership criteria. Unfortunately, private car sellers do not meet our criteria, so we cannot offer finance on these vehicles.
Our dealership criteria includes the following conditions:
- Dealerships can be franchised or not franchised
- The dealership must have a physical showroom or forecourt
- The dealer must be VAT-registered
- The dealership must have a website with vehicle listings and a landline number
- The dealership must have an FCA number, which shows that a financial body regulates them
These rules help to protect your purchase, making sure you’re buying from a reputable dealership. We understand that finding the right vehicle can be tricky, and that’s why our friendly Direct Sales team will be happy to help you with your search.
Once you’ve got a quote and you’re approved, you can immediately start browsing vehicles using our vehicle finder in partnership with Exchange & Mart.
What is a private seller?
A private car seller is a person who sells their vehicle directly to a car buyer without involving a dealership.
Typically, a private seller will not be a professional car salesperson but the legal owner of a vehicle who is looking to sell the car themselves without trading it in or part-exchanging it.
Many people look to private sellers as a way to save some money and enjoy more scope for negotiation on asking prices. But, whilst private car sales do have their benefits, they sometimes present potential risks for buyers. For example, if anything goes wrong with the vehicle, it can be challenging to prove you have been mis-sold and reclaim what you feel you are owed.
How are private sales different from buying from a dealership?
Private car sales are less protected than buying through a dealership. While dealerships must adhere to regulations, private sellers do not, so if something goes wrong with the vehicle, you may end up footing the bill for expensive repairs. Within the used car sales industry, this practice is generally referred to as ‘sold as seen’, meaning that there is no legal obligation for the private seller to disclose every feature or imperfection of their vehicle.
In terms of the overall buying experience, some people report getting a better level of customer service from approved dealerships than from private sellers. A car dealership will typically put time into making sure its vehicles are clean and in good working order before advertising them to buyers, while private sellers may not.
What are the benefits of buying a car from a dealership?
Although there may be a wider range of vehicles available to you through private sellers, there are some drawbacks, like not having the same warranties and legal protection as you would if you purchased from a dealership.
Additionally, there are a number of key benefits to buying from a dealership, including:
Why don’t companies finance privately sold cars?
Moneybarn will only enter into a car finance agreement once we are satisfied that you, the seller, and the vehicle you want to buy fully meet our lending and dealership criteria. Unfortunately, private car sellers do not meet our criteria, so we cannot offer finance on these vehicles.
Our dealership criteria includes the following conditions:
- Dealerships can be franchised or not franchised
- The dealership must have a physical showroom or forecourt
- The dealer must be VAT-registered
- The dealership must have a website with vehicle listings and a landline number
- The dealership must have an FCA number, which shows that a financial body regulates them
These rules help to protect your purchase, making sure you’re buying from a reputable dealership. We understand that finding the right vehicle can be tricky, and that’s why our friendly Direct Sales team will be happy to help you with your search.
Once you’ve got a quote and you’re approved, you can immediately start browsing vehicles using our vehicle finder in partnership with Exchange & Mart.
What is a private seller?
A private car seller is a person who sells their vehicle directly to a car buyer without involving a dealership.
Typically, a private seller will not be a professional car salesperson but the legal owner of a vehicle who is looking to sell the car themselves without trading it in or part-exchanging it.
Many people look to private sellers as a way to save some money and enjoy more scope for negotiation on asking prices. But, whilst private car sales do have their benefits, they sometimes present potential risks for buyers. For example, if anything goes wrong with the vehicle, it can be challenging to prove you have been mis-sold and reclaim what you feel you are owed.
How are private sales different from buying from a dealership?
Private car sales are less protected than buying through a dealership. While dealerships must adhere to regulations, private sellers do not, so if something goes wrong with the vehicle, you may end up footing the bill for expensive repairs. Within the used car sales industry, this practice is generally referred to as ‘sold as seen’, meaning that there is no legal obligation for the private seller to disclose every feature or imperfection of their vehicle.
In terms of the overall buying experience, some people report getting a better level of customer service from approved dealerships than from private sellers. A car dealership will typically put time into making sure its vehicles are clean and in good working order before advertising them to buyers, while private sellers may not.
What are the benefits of buying a car from a dealership?
Although there may be a wider range of vehicles available to you through private sellers, there are some drawbacks, like not having the same warranties and legal protection as you would if you purchased from a dealership.
Additionally, there are a number of key benefits to buying from a dealership, including:
Expertise
A car dealer typically has more technical knowledge and expertise than a private seller, and before you buy a car from a dealership, it will likely have gone through an inspection. If there are any faults, they will likely be pictured and listed in the advert.
Aftercare
When you buy a car privately, you take full responsibility for ensuring it’s adequately maintained and serviced. Some dealerships may include after-sale care, like services and MOTs. This is not the case for a private sale, and there may be less protection available.
Optional extras
When you buy a car through a dealership, they may be able to include optional extras, like extended warranties or even car modifications, like alloy wheels. These deals can provide additional value for money and help you ensure the best deal possible.
Better quality
Although a large number of cars may be available through private sale, this does not guarantee quality. Dealerships have large selections under one roof, meaning you won’t have to spend hours trawling through adverts to find a suitable car.
Financing
As well as a wider range of cars, a dealership may also provide you with several ways of paying for your new vehicle. This can be convenient if you would prefer to pay monthly as opposed to upfront for the vehicle you want or need.
Expertise
A car dealer typically has more technical knowledge and expertise than a private seller, and before you buy a car from a dealership, it will likely have gone through an inspection. If there are any faults, they will likely be pictured and listed in the advert.
Aftercare
When you buy a car privately, you take full responsibility for ensuring it’s adequately maintained and serviced. Some dealerships may include after-sale care, like services and MOTs. This is not the case for a private sale, and there may be less protection available.
Optional extras
When you buy a car through a dealership, they may be able to include optional extras, like extended warranties or even car modifications, like alloy wheels. These deals can provide additional value for money and help you ensure the best deal possible.
Better quality
Although a large number of cars may be available through private sale, this does not guarantee quality. Dealerships have large selections under one roof, meaning you won’t have to spend hours trawling through adverts to find a suitable car.
Financing
As well as a wider range of cars, a dealership may also provide you with several ways of paying for your new vehicle. This can be convenient if you would prefer to pay monthly as opposed to upfront for the vehicle you want or need.
Car finance for a better road ahead
We work with a range of approved dealerships to help you find the car, van, or motorbike that you need. Better yet, our Conditional Sale agreement means you’ll own the car once you make your final payment – with no additional fee.
As a bad credit car finance direct lender, we can offer finance to people with poor or bad credit, even if they’ve been rejected elsewhere. We’re proud to have over 30 years of experience helping people up and down the UK.
To get started, try out our car finance calculator to see what your agreement might look like. Or, if you’re ready, get a quote in less than 5 minutes – we only use a soft search at the point of application.
Representative 30.5% APR.
FAQs around buying a car from a private seller
Can you return a car to a private seller?
Before buying a car privately, you should undertake proper due diligence and ensure you have vetted the car’s MOT and service history. This will give you peace of mind that the vehicle you’re buying has been adequately looked after and maintained.
If you buy a car in a private sale but do not think it matches the description, is fit for purpose or is generally not of satisfactory quality, according to Citizens Advice you can return it. However, you will have to prove that the car is not up to standard and was in that condition when you bought it.
Where can you get finance for privately sold vehicles?
Some companies will allow you to finance a car from a private seller as part of a Hire Purchase (HP) agreement. This enables you to make monthly payments to the lender until you have fully paid back what you owe. However, the finance is secured against the vehicle, so you will only be the car’s legal owner once the finance agreement is fully paid off.
Alternatively, if you would prefer to borrow money and pay monthly to make your next car purchase, you could take out a personal loan from a bank or building society. This way, you can borrow a lump sum to pay for the car and repay it in monthly instalments over a set time.
If you choose to buy a used car with a personal loan, you will automatically become the vehicle’s legal owner rather than its registered keeper. Read our full guide to learn more about the difference between car finance and personal loans.
How does a personal loan work when buying privately?
Personal loans work the same way, whether you’re buying a second-hand car privately or a brand-new one from a dealership. You borrow a lump sum to pay for the vehicle and make monthly repayments on the loan until the debt is cleared.
Is buying a car privately worth it?
Many car buyers choose to shop on the private market because the cars can be cheaper and there’s more room for negotiation. Additionally, as vehicles typically depreciate fastest and most significantly in their first few years of registration, you may find that a used car holds its value better than a new car. So, if you think you may want to sell the car after a certain period of time, buying a used vehicle could be more worthwhile.
That said, when buying from a private seller, you do not have the same protection as you would if you bought from a dealership. Private car sales can be especially challenging because you risk being sold a car with defects that have not been disclosed. By comparison, a dealer is legally obligated to make you aware of any problems before you buy a car.
What is the best way to pay for a used car from a private seller?
Cash and bank transfers are the most common payment methods for a used car. You should only pay for the car once you have viewed, inspected and test-driven it and checked all other information, e.g. servicing and MOT history, and you’re confident the purchase is the right fit for you.
Car finance for a better road ahead
We work with a range of approved dealerships to help you find the car, van, or motorbike that you need. Better yet, our Conditional Sale agreement means you’ll own the car once you make your final payment – with no additional fee.
As a bad credit car finance direct lender, we can offer finance to people with poor or bad credit, even if they’ve been rejected elsewhere. We’re proud to have over 30 years of experience helping people up and down the UK.
To get started, try out our car finance calculator to see what your agreement might look like. Or, if you’re ready, get a quote in less than 5 minutes – we only use a soft search at the point of application.
Representative 30.5% APR.
FAQs around buying a car from a private seller
Can you return a car to a private seller?
Before buying a car privately, you should undertake proper due diligence and ensure you have vetted the car’s MOT and service history. This will give you peace of mind that the vehicle you’re buying has been adequately looked after and maintained.
If you buy a car in a private sale but do not think it matches the description, is fit for purpose or is generally not of satisfactory quality, according to Citizens Advice you can return it. However, you will have to prove that the car is not up to standard and was in that condition when you bought it.
Where can you get finance for privately sold vehicles?
Some companies will allow you to finance a car from a private seller as part of a Hire Purchase (HP) agreement. This enables you to make monthly payments to the lender until you have fully paid back what you owe. However, the finance is secured against the vehicle, so you will only be the car’s legal owner once the finance agreement is fully paid off.
Alternatively, if you would prefer to borrow money and pay monthly to make your next car purchase, you could take out a personal loan from a bank or building society. This way, you can borrow a lump sum to pay for the car and repay it in monthly instalments over a set time.
If you choose to buy a used car with a personal loan, you will automatically become the vehicle’s legal owner rather than its registered keeper. Read our full guide to learn more about the difference between car finance and personal loans.
How does a personal loan work when buying privately?
Personal loans work the same way, whether you’re buying a second-hand car privately or a brand-new one from a dealership. You borrow a lump sum to pay for the vehicle and make monthly repayments on the loan until the debt is cleared.
Is buying a car privately worth it?
Many car buyers choose to shop on the private market because the cars can be cheaper and there’s more room for negotiation. Additionally, as vehicles typically depreciate fastest and most significantly in their first few years of registration, you may find that a used car holds its value better than a new car. So, if you think you may want to sell the car after a certain period of time, buying a used vehicle could be more worthwhile.
That said, when buying from a private seller, you do not have the same protection as you would if you bought from a dealership. Private car sales can be especially challenging because you risk being sold a car with defects that have not been disclosed. By comparison, a dealer is legally obligated to make you aware of any problems before you buy a car.
What is the best way to pay for a used car from a private seller?
Cash and bank transfers are the most common payment methods for a used car. You should only pay for the car once you have viewed, inspected and test-driven it and checked all other information, e.g. servicing and MOT history, and you’re confident the purchase is the right fit for you.
For a better road ahead
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
