Private car sale financing??

[Vehicleused]

Hi all, new to this site... was hoping someone on here knows how to go about financing a vehicle privately? I've asked a few of my "car guy" friends but get mixed responses. I am sure I'll get the same here but any information will help. I thank you all in advance and look forward to hearing from you.

[4doorj]

Just go to the bank and apply for a car loan.

[403ep3]

I'd say no but if you do, CONTRACT!

[ExtraSlow]

If you own your house, a HELOC will probably give you the lowest rate. Regular unsecured LOC are decent. Car loans from banks are often at a pretty high rate for used cars, so they are unattractive.

[Xtrema]

HELOC > LOC > Car Loan > all other credit services

[MDO_Calgary]

I've worked at the bank for many years. Simplest thing is a personal loan to buy a car. If you have enough equity in your home you should get a home equity line of credit and use that to buy your car, prime + 1 or 3.5 percent! That's incredibly low. A car loan would cost you a little bit more. Also keep in mind if you are not putting collision on your car you'll need to get an unsecured personal loan, otherwise if the banks use your ride for collateral they'll require you to have full coverage on your vehicle. Go to atb financial, we got the best rates right now :)

[Cos]

TD wont give you an auto loan unless you purchase from a dealer. Found that out yesterday. :nut:

[derran.m]

Originally posted by Cos
TD wont give you an auto loan unless you purchase from a dealer. Found that out yesterday. :nut:

Hmm ... seems I bought 3 of my cars via TD Auto loan ?!?!?!?! and all were private deals ... it was difficult, but being in a small town not that bad - just gotta have your ducks in a row - seller must provide bill of sale prior to bank releasing the cheque that is made out to the seller.

[Cos]

Originally posted by derran.m


Hmm ... seems I bought 3 of my cars via TD Auto loan ?!?!?!?! and all were private deals ... it was difficult, but being in a small town not that bad - just gotta have your ducks in a row - seller must provide bill of sale prior to bank releasing the cheque that is made out to the seller.

hmm when I called they said they could only write me a loan to a dealer purchase. I dunno, she recommended HELOC or ULOC instead.

[Sorath]

Originally posted by Cos
TD wont give you an auto loan unless you purchase from a dealer. Found that out yesterday. :nut:

not true.

[Redlyne_mr2]

Originally posted by Cos
TD wont give you an auto loan unless you purchase from a dealer. Found that out yesterday. :nut:
Who told you this? Banks are in the business of doing loans. Maybe they won't give you the same rate they give their dealers but you can get a loan from them anytime.

As for Heloc's they're a PITA if you're only borrowing $30 000 and less. I've never done one but from what I've been told you need to have assessments done and a lawyer for the process.

[derran.m]

Originally posted by Cos


hmm when I called they said they could only write me a loan to a dealer purchase. I dunno, she recommended HELOC or ULOC instead.

Chances are it's something about the bill of sale? I had a hell of a time with the first few because the bank would not release funds without having a copy of the bill of sale - mostly dealers are the only ones who will hand over a bill of sale to a car not paid for ... private sales you gotta do some sweet talking to get bill of sale prior to paying for it ... one time I ended up having to get my old man to leave his car keys and credit card as collateral till we presented the bank draft. And only reason this guy was so flexible and willing was because his wife was a loan officer for the local credit union...

And on top of it, who would go to a dealer but finance thru the bank? Last time I considered a bank loan, dealership offered me 20% less interest!

[MDO_Calgary]

Originally posted by Redlyne_mr2

Who told you this? Banks are in the business of doing loans. Maybe they won't give you the same rate they give their dealers but you can get a loan from them anytime.

As for Heloc's they're a PITA if you're only borrowing $30 000 and less. I've never done one but from what I've been told you need to have assessments done and a lawyer for the process.

It's not a complicated process, but there could be fee's depending on the age / value of your property.

As long as your home is newer then 40 years old, you can borrow up to 60% based on the city assessed value. If you need to exceed 60% loan to value, or your property is 40 years old or older you'll then be required to order an appraisal * 240 for the city *

Secondly, if you have to increase the amount you have registered at land titles, to enable the additional borrowing of funds the bank will go through First Canadian Title, Fee is 339.

At the end of the day you could go through the entire process for free, or it may cost you a maximum of 600 ish.

[97luder]

are you trying to sell to some who wants to make payments or are you trying to buy a car for your self ?

[Skyline_Addict]

Originally posted by MDO_Calgary


It's not a complicated process, but there could be fee's depending on the age / value of your property.

As long as your home is newer then 40 years old, you can borrow up to 60% based on the city assessed value. If you need to exceed 60% loan to value, or your property is 40 years old or older you'll then be required to order an appraisal * 240 for the city *


By law, you can go up to 80% of the official appraised value, which is what most banks will use. I've not heard of any banks using city assessed values as a waypoint, regardless of how "close" they are to the official appraisal.

[MDO_Calgary]

Originally posted by Skyline_Addict


By law, you can go up to 80% of the official appraised value, which is what most banks will use. I've not heard of any banks using city assessed values as a waypoint, regardless of how "close" they are to the official appraisal.

As long as you stay within 60% LTV and the property is less then 40 years old you can just go by the city assessed value.
At least thats the rule for ATB financial, that was also the rule when I worked at RBC Royal Bank.

I'm a Mortgage Development Manager for ATB Financial, trust me I know the rules and regulations.

You can exceed 80% and actually go back up to 90% as long as you go through Genworth or CMHC for insurance.

[Cos]

You guys may be right. However when I called last week the easyline lady told me that unless I did a dealer purchase I was stuck to a consolidation loan, my uloc, or I could apply for a heloc. I didn't want to use my uloc at 6 whatever % if I could get an auto loan for less. The heloc wouldnt work because it is a small amount of money.

[mikey_p]

Any dealer rate is going to be 6+% (LOCKED IN) depending on the amount of money and length of term. For me, my best option was an unsecured LOC. Cheapest intrest rate for the hassle. I didnt want to involve my house and all that.

Keep in mind there is a difference between a Auto loan through a bank and a LOC or a HELOC.

The HELOC takes your house and property as collateral and if you sell your house the HELOC has to be paid off unless transfered to another home with equity. If property value decreases drasticlly then the banks have a right to pull a HELOC and request you to pay it off. Many smaller banks did this during the recession days..

A unsecured LOC never seems to get paid off. I've seen great customers with a LOC that keeps adding up and up. Its easy to pay the minimum payments even if its just at christmas or twice during the year. Its way to easy to leave a balance on it. Not to mention you never really know what you owe on your vehicle specificlly when you go back to trade it in. Your 05 Xterra could be on the LOC for 13,000 and on top of the jimmy's karate lessons/hockey gear/trip to mexico etc...... However the benifits are good. Still an affordable intrest rate and easy to maintain and borrow from if needed.

A dealer purchase or a Conditional Sales Contract at a dealership has a couple downfalls. For one you have to pay GST/PST and dealer fee's. Other downfall is a 6+% intrest rate. If you can live with both of those then a dealership is super easy. Aside from what many people think about dealerships there are some very helpful people in the industry.. You just have to find them. A conditional sales contract only uses tha vehicle as collateral and if you do end up losing your job and not paying it back.. its either seize or sue. In lamens terms they cant take your house or anything else. They will seize your car and sell it at auction.. or sue you and try to get the money.. Most of the time they just send the car to auction and your liable for the remaining balance. (stays on your credit for 7 years and you wont be able to borrow from that bank).. Now thats a little far fetched but it happens.. People lose there jobs.. Its best to understand before you make the choice..

BTW!! Cash is always best!