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 Getting person to person auto loans
  Where are the best auto loan interest rates?
By the EchoBay Loans Expert
 Getting person to person auto loans
Dear EchoBay Expert: I've found online the car I want to purchase but it's being sold by a person, not a regular car dealer. Do most lenders offer money for person to person auto loans and are there any differences in them vs. a regular new car loan?

Dear Loyal Reader: Purchasing a used car directly from the previous owner is a great way to cut out the costs of a dealer markup and get the vehicle history right from the horse's mouth (rather than listening to the standard dealer story of the car belonging to an elderly grandma type who only drove it to church every week).

Luckily, there are lenders who deal with person to person auto loans, though there are certain aspects of these loans that you will need to be aware of. On the upside, you might not need a down payment for this car purchase since these lenders won't usually require one. However, your credit will need to be in pretty good shape and you will probably wind up paying a higher interest rate for this type of loan.

Once you purchase the car, be prepared to wait a week or two to get the title in your hands if the previous owner needs to pay off his or her current car loan. Even though person to person auto loans don't usually require a down payment, you will need the cash on hand to pay for the taxes, title, registration and license fees since you won't be able to roll those costs into the loan amount.

To find out exactly how much those costs will add up to, contact your local motor vehicles department and they should be able to give you a fairly accurate estimate.

Another difference vs. a new car loan is that used car loans generally have a shorter term which could mean a higher monthly payment since the loan is paid down quicker than a new car loan. Since used car loans frequently have much lower loan amounts than new car loans, this probably won't be an issue for you.



 Where are the best auto loan interest rates?
Dear EchoBay Expert: I want to ensure I get the best auto loan interest rate and want to look under every rock for the lender that can give me the best rate. What are my choices of lenders and who has the best rates?

Dear Loyal Reader: Car buyers have a wide range of financing options to choose from, and if cost is your main concern, you'll find the best auto loan interest rates online. The best deals will not be found at the local car dealership, as they try to mark up the interest rate in order to add more money to their profit margin, and buy-here/pay-here car lots are an insult when it comes to the interest rates they offer.

The local bank can offer you a decent interest rate, but not the best. Credit unions can usually beat out the local banks because they are nonprofit organizations that aim to save their members money. Online lenders can usually beat them all because of their extremely low overhead and the competitive nature of online lending. If you don't mind putting your home up as collateral for your car purchase, you might also want to look into using a home equity loan to finance your car purchase if interest rates are low.

If worse comes to worse and you don't qualify for an online auto loan or a loan with any of the traditional lenders, don't fall for the buy-here/pay-here schemes mentioned above. Check with your friends or family. They may be willing to lend you the money at a low interest rate or with no interest at all.


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