Chocolates melt, flowers fade, but a great car and a great car deal? That’s something you can love for years to come! Maybe you’ve been searching for the right vehicle, or perhaps you just spotted one that feels like the one — sitting in a neighbor’s driveway, parked at the office with a “For Sale” sign or listed on Facebook Marketplace.
Buying from a private seller can be a great option, offering unique vehicles and more direct negotiation. But before you start planning your first drive together, there’s one important thing to consider: financing.
Unlike dealerships, which often arrange financing as part of the buying process, private sellers require full payment upfront. That means you’ll need to secure a loan ahead of time. But don’t worry — with a little preparation, it’s easier than you think. Here’s how to set yourself up for a smooth, stress-free purchase.
How Lending Works for Private Vehicle Purchases
To keep the buying process simple, it’s best to secure financing before making an offer. Here’s how to get started and what to expect:
1. Get Pre-Approved for a Loan
Before making an offer, check with your bank about how long pre-approval takes — some lenders can provide a decision within a business day, while others may take longer.
At Bank of Utah, most borrowers receive pre-approval in just one business day or less, making it easy to move forward quickly when you find the right car. Having pre-approval in hand also helps in negotiations, showing the seller you're serious.
2. Consider Your Loan Terms
Auto loans come with a range of financing options, so it’s important to review the details:
- Loan Amount – Some lenders offer financing beyond the purchase price. At Bank of Utah, borrowers can finance up to 115 percent of the car’s value to help cover taxes, registration or other costs.
- Loan Term – Terms typically range from 36 to 84 months, allowing you to choose a repayment plan that fits your budget.
- Fees – Compare fees among lenders, as some institutions offer lower fees, letting you keep more money for your car.
3. Gather Vehicle Information
Lenders need details about the car before approving your loan, including:
- Vehicle Identification Number (VIN) – This allows the bank to verify the car’s history.
- Mileage – Higher mileage can affect loan approval and interest rates.
- Vehicle Age – Some lenders have restrictions on how old a car can be to qualify for financing. At Bank of Utah, for example, auto loans are available for vehicles up to 15 years old, but policies vary by lender, so it’s important to check before applying.
- Rebuilt Titles – Some lenders limit how much they’ll finance for vehicles with rebuilt titles — cars that were previously declared a total loss by an insurance company due to damage but have since been repaired and inspected to be roadworthy again.
4. Get an Appraisal (If Required)
Some financial institutions require an appraisal or valuation to ensure the car is worth the loan amount. They may use resources like “JD Powers or Kelly Blue Book” or request an inspection.
5. Finalize the Loan and Payment
Once your loan is approved, the bank will typically issue a check directly to the seller or to you, which you then hand over. Be sure to confirm how your lender handles this step, as it can vary.
Why Financing Through a Bank is a Smart and Secure Move
When buying from a private seller, financing through a trusted bank isn’t just about getting a loan — it’s about ensuring the transaction is safe, transparent and financially sound. Here’s why working with your bank is a smart move:
1. A Safe and Secure Purchase
Private sales don’t come with the same built-in protections as dealership purchases, so it’s important for buyers to do their due diligence before making a purchase. As part of the lending process, your bank will review certain documents to help confirm ownership before funding the loan. However, the buyer is ultimately responsible for verifying the car’s condition and history.
That’s where a seasoned lender can help. While they don’t inspect vehicles, they can walk you through common red flags to watch for — whether it’s issues with the car, like odometer fraud or title problems, or warning signs in the seller’s behavior. For example, if a seller is rushing the process, avoiding questions or insisting on an unusual payment method, it could be a sign of trouble.
2. Clear Communication and Guidance
Buying from an individual involves a lot of paperwork — title transfers, bill of sale and registration. Your bank helps ensure all necessary documents are in place and that the payment process goes smoothly. If you’re unsure about a step, you have a trusted financial expert to guide you.
3. Competitive Rates You Can Trust
Unlike some online lenders with variable rates and confusing fine print, banks offer transparent loan terms with competitive interest rates. You’ll know exactly what you’re signing up for, with no surprises.
4. A Financial Partner Looking Out for You
Your bank isn’t just handing out a loan — it’s ensuring the purchase fits within your budget and financial goals. They’ll work with you to determine a reasonable loan amount, explain repayment terms and offer advice to make sure the car is a good investment.
5. Streamlined Payment Process
Rather than dealing with large cash transactions or awkward money exchanges, banks typically issue a check directly to the seller or provide secure electronic payment options. This ensures that the transaction is safe and properly documented.
6. Ongoing Support
Even after the purchase, your bank remains a resource. If you have questions about your loan, need to adjust your payments or want to refinance in the future, you have a trusted financial institution that’s there to help.
The Trust Factor
Buying a car from a private seller can feel uncertain, but financing through your bank brings peace of mind. With their support, you know the car is legally sound, the transaction is secure and you’re getting a fair loan with terms you can trust. Instead of navigating the process alone, you have a financial partner ensuring everything runs smoothly.
Final Thoughts
A great deal is something to celebrate — especially when it means getting the right car at the right price. With financing in place, you can focus on the excitement of your purchase instead of the details of payment. A trusted bank can help make the process smooth, secure and stress-free so you can drive away with confidence.
If you're looking to make your next car purchase one to love, reach out to a Bank of Utah consumer relationship manager. We're always happy to help and ready to answer any questions along the way.
Kathy Davis, AVP, Consumer Lending Manager, brings over 33 years of banking experience, specializing in auto loans, unsecured loans, and home equity lines of credit. A dedicated team member at Bank of Utah since 2005, she is passionate about guiding clients through the lending process and educating borrowers on responsible financial decisions.
