| Most people don't have enough cash to just go out | | | | As a consequence of condensing a loan into a |
| and buy a car. Dealerships offer auto financing, but | | | | shorter duration each individual monthly payment |
| what if you don't want to buy from a dealer? Buying | | | | must be higher. As a rule of thumb a 48 month loan |
| a car from a private party can save you a lot of | | | | of X will have monthly payments roughly twice as |
| money but I doubt you'll find an individual willing to let | | | | high as a 72 month loan of X. |
| you pay them overtime. The answer is to get a | | | | Even though monthly payments may be higher, most |
| private party auto loan from an independent financial | | | | private lenders will not require a down payment. This |
| institution. This type of loan is similar to a dealership | | | | can be useful if you don't have enough cash for the |
| loan, but there are usually a few differences. | | | | monthly payment but will be able to cover the |
| The terms of a private party auto loan are typically | | | | monthly payments just fine. Of course, if you can |
| much shorter than that of a dealership loan. From a | | | | afford to make a down payment you should |
| dealer you would expect the duration to be between | | | | definitely do so, the lower the principal of the loan |
| 60 and 72 months. On the other hand most private | | | | the less interest you will end up paying. |
| lenders won't issue loans longer than 48 months. | | | | All things considered, a private party loan is an |
| You may end up with a higher interest rate with a | | | | excellent choice for car buyers who are looking to |
| loan from the bank compared to a dealer. Just don't | | | | buy a car from someone other than a dealer, or |
| forget to take into account the duration of the loan | | | | even to refinance an existing dealership loan early. |
| because that will determine the amount of interest | | | | There are a multitude of lenders available, many of |
| you will actually be required to pay. In most cases | | | | which you can apply to online. However the best |
| you will end up paying less interest even at a higher | | | | place to start is your current financial institution as |
| interest rate if your loan is for a shorter period of | | | | they often will be willing to give preferential |
| time. | | | | treatment to their existing customers. |
| The other thing to consider is your monthly payment. | | | | |