If you’re considering buying a car from a private seller and are wondering whether you can finance it, much depends on who’s doing the financing. Many buyers consider private-party transactions for the broader selection and potential savings, but this way of buying requires a different financing approach than buying from a dealership.

At Credit Acceptance, we do not finance vehicles purchased from private individuals. Our auto financing is available only through a nationwide network of dealerships. That means to work with us, your next vehicle must come from a dealer enrolled in our program — not from a private seller, auto broker, or third-party marketplace.

So, what if you've found the perfect car from a private owner? You still have several financing options.

Alternatives to traditional dealership financing

Several financial institutions specialize in financing for private-party vehicle purchases. Here’s how they work, and what you should consider before choosing one.

Credit unions

Many credit unions offer auto financing specifically designed for private sales. Once you’re a member, the process often includes applying for pre-approval, submitting the vehicle’s information (including VIN and mileage), and having the credit union issue payment directly to the seller. This kind of financing tends to come with competitive interest rates and flexible terms, though processing may take longer. Some credit unions may also require a vehicle inspection.

Banks

Many banks provide private-party auto financing, following a similar process to credit unions. You’ll apply by providing your financial info and the vehicle details. If approved, the bank will pay the seller or lienholder directly and typically hold the vehicle’s title until the financing is paid off. Keep in mind that banks may have stricter eligibility requirements and vehicle restrictions.

Various fintech websites

Several websites offer financing for private-party purchases. It’s often quicker to secure financing this way, with applications and pre-qualification done entirely online. Similar to bands and credit unions, some companies allow for funds to be directly deposited or paid directly to the seller. While going this route may be convenient, interest rates could be higher, especially if the vehicle is older.

Personal loans

Though not designed specifically for auto purchases, personal loans are another option. They can be used to buy a car from a private seller, and place no restrictions on the vehicle’s age or condition. However, since they don’t use the car as collateral, interest rates tend to be higher while requiring shorter repayment periods.

Peer-to-peer platforms

Individual investors can sometimes fund an auto purchase through what’s called a peer-to-peer (P2P) platform. These platforms may offer more flexible approval criteria and can be useful if you don’t qualify through traditional banks or credit unions. Interest rates may be higher, though, and approval times can vary.

Before you finalize a private seller purchase…

• Verify the vehicle’s title and ensure there are no liens

• Get a mechanic’s inspection to avoid hidden issues

• Clarify whether the seller’s presence is required to finalize paperwork

• Confirm how payment will be made

Want the peace of mind of buying from a dealership?

Credit Acceptance works with over 15,000 dealers to offer financing solutions to customers at all credit levels. Together, we believe everyone deserves a chance to buy a vehicle, whether they have bad credit, no credit, or bankruptcy. To get behind the wheel of a reliable vehicle through one of our participating dealers, start the pre-qualification process today!