If you are thinking of buying a reliable and affordable car, don't just concentrate on new and used car dealers. You can achieve success in buying a car by choosing one more alternative called "Private Party Car Purchase."
In the process of private party purchase, there are two parties involved:
1. Private Seller - He/she is a person just like you who wants to sell his/her car without contacting a dealer.
2. Private Buyer - If you want to buy a car from a private seller instead of a dealer, you qualify as a private buyer.
Why choose Private Party Car Purchase?
Every used car has four values:
1. Retail Value ( Cost of Used Car at the Dealership Lot)
2. Trade-in Value ( Value offered by the Dealer that will be deducted from the Price of your New Vehicle)
3. CPO Value ( Cost of a Used Car if its Certified and includes Extended Warranty)
4. Private Party Value ( Value at which a Private Seller is willing to sell the Car)
Usually, the Private Party Value of a car is lower than its other values. It is because a private seller doesn't have to incur operating costs and marketing costs that a dealer has to incur in order to sell his car. Also, the private seller is looking to sell the car quickly which means he/she will be more flexible in negotiation than a dealer.
Useful Tips for Private Party Car Purchase
Most car buyers shy away from buying a car from a private seller because they are afraid of choosing the wrong car. Also, there is fear of not finding the perfect car loan deal. But don't worry. If you want to become successful in obtaining a good deal, here are few tips to help you:
When you buy a car, you have to assume a financial responsibility. You must know the amount of monthly payments that will be paid easily by you. For that, you must calculate your Net Monthly Expendable Amount (Total Monthly Income - Totally Monthly Expenses - Savings). It will help you in ascertaining your desirable monthly payment amount.
Details about Documents
Cars are expensive; even those purchased from private sellers. So, you will need a loan to buy a car. Keep all your documents ready like:
a. Your Current Financial Statements and Bank Statements
b. Your Previous Loan and Mortgage Records
c. Income and Employment Verification Proof
d. Receipts of Utility Bills
You must know what kind of car you are looking to buy. If you want to buy a convertible, there is no point in meeting private sellers with a station wagon or a sports sedan.
It is important to know everything about the car. Learn if there have been any accident or damage. Also, ask your trusted mechanic to check the car thoroughly. It will help you in eliminating lemons.
Although car loan criteria vary from one lending agency to another, there are few requirements that remain same like:
a. The car should not be driven for more than 100,000 miles.
b. The car should be 8 years old or newer.
So, whenever you choose a car, ensure that it meets the above mentioned requirements.
Private Party Car Loans
You can apply for a private party loan before or after choosing a car. If you apply for pre-approved loan program, the lender will ascertain your financial stability and provide you with a pre-approved loan amount.
Remember to choose an auto financing company, a lender or a bank that provides private party car loan because there is no point in applying with lending agencies that don't cater to your requirements.
So, these are the simple, but highly useful tips for making a private party car purchase. Remember them to become a successful car buyer.
All the Best!
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