A dealer sale is relatively tidy. The dealer holds the car, prepares the paperwork and often has a finance team in the next room. A private sale is different: you, a seller you probably have not met before, a car and a lender who needs to be comfortable with all three. Knowing the typical sequence helps you avoid the awkward moment where the seller wants payment and your loan is not ready.
Start with the finance conversation, not the test drive
It can feel backwards, but speaking to a lender early means you know your borrowing range before you fall for a car. Many buyers find it helpful to ask what the lender needs for a private purchase, how long it takes and whether there are age or kilometre limits on the vehicle.
Keep in mind that being told you may be eligible for an amount is not the same as final approval. The lender will usually still want to see details of the specific car and may have conditions. If you have a pre-approval, read exactly what it says and when it expires.
What the lender is likely to ask about the car
Every lender is different, but common requests include:
- Make, model, year and VIN
- Odometer reading
- Agreed purchase price
- The seller's name and how the sale will be paid
- Confirmation that there is no existing security over the car (the PPSR search)
Lenders can also ask for a copy of the advertisement, a signed sale agreement or a payment invoice. Having a simple written agreement with the seller is good practice regardless.
A typical sequence
- Agree on the car and price subject to checks. Make your offer conditional on a PPSR check and an independent inspection.
- Run the PPSR check and inspect the car. Do this before finance paperwork goes any further.
- Give the lender the car details. Ask how the loan will be settled.
- Finalise approval and sign the loan contract. Read it first, including fees.
- Settlement. The lender typically pays the seller directly or provides funds according to its process. Do not assume this is instant.
- Transfer and registration. You and the seller complete the transfer paperwork for your state or territory within its time limit.
- Insurance in place before you drive away.
Paying the seller safely
Cash handovers for big amounts are a risk for both sides. A bank transfer or a payment arranged through your lender leaves a clearer trail. If the lender pays the seller, tell the seller early so they are not surprised by timing.
Be wary of sellers who:
- Push you to pay a deposit before you have seen the car or the paperwork
- Will not let you inspect the car independently
- Ask for payment to a third party you cannot verify
- Offer a price far below similar cars, with an urgent story attached
The ACCC's Scamwatch (scamwatch.gov.au) lists current vehicle sale scams and is worth a look before you buy.
What if the settlement takes a few days?
Private sellers often want a quick sale. If your finance needs a couple of days, say so up front, and agree a realistic timeline. A seller who really wants to sell will usually wait; one who will not is telling you something.
If a deposit is part of the agreement, keep it small, put the terms in writing and keep proof of payment. A deposit is usually only refundable according to what you both agreed, so be clear about what happens if the loan falls through or the inspection finds a problem.
The cost of convenience
Some buyers pay slightly more for the simplicity of a dealer sale. Others prefer the room to negotiate in a private deal. Neither choice is wrong. What matters is that you understand the extra steps you take on yourself in a private sale: the PPSR check, the inspection, the transfer and the safe payment.
Your loan comes with its own homework
Whatever the sale type, check the loan's term, fees and total repaid. If you want to see how different terms change your repayments, ASIC's MoneySmart website (moneysmart.gov.au) has free car loan calculators.
If you would like to compare finance options before you commit to a private purchase, you can start a free enquiry. It is free to enquire, there is no obligation and approval is always subject to lender criteria.
Meanwhile, if you plan to sell your current car to fund part of the purchase, you can list it on Anything Marketplace and compare that with what a dealer might offer as a trade-in.
This article is general information only and is not financial or legal advice.
