From CreditKarma.com…
Buying a car from a private seller could help you save money. For example, sales prices tend to be lower through private sellers than at a dealership.
But private sellers don’t offer financing (and you should be very careful if they do). And that’s where a private-party auto loan can come in. With a private-party loan, you get the perk of financing as if you were buying from a dealership, while getting the savings that a private seller may have to offer.
Private-party loans work in a similar way to other auto loans because they’re typically secured, with the car serving as collateral. So just like with other auto loans, if you default on the loan, the lender can repossess the vehicle.
Also like other auto loans, private-party loans have an annual percentage rate and fixed loan term that affect your monthly payment. Depending on the lender, private-party loan terms typically range from 12 to 84 months.
