Buying a Car from a Friend

[wvf3]

It's been slightly over a year since my discharge and I haven't really thought about buying a car yet but I have a friend at work who is selling a really nice car at an excellent price. Suffice to say, that I have checked it out and it's a great bargain. It's not that there is anything wrong with the car--it just so happens that my friend needs the money. So basically I need a car loan but I really don't know with whom to apply considering this is a "non-dealer" purchase. Also I am a little afraid that if I go around applying for a loan at different places it's going to reflect poorly on my already poor credit.

Does anyone have any suggestions? I would be grateful.

[sharksfan]

Try a credit union! When everyone else told me no on my very first car loan years ago, a local credit union said yes!

Sad to say that this very same credit union is going to suffer a $50K loss when I file next week... They have been nothing but good to my wife and I for our various needs

Good luck on your purchase!

[emoney]

Unless you have saved for a 1/3 downpayment and can pay the balance off in two years you may be ready to buy a car.
If you do before you are ready it will own you and not the other way around.
regards,
emoney

[BKOnce]

How much is an excellence price?

[wvf3]

Well, KBB listed the car value at $22,000 and he's willing to sell for $18,000. He's lucky because he paid cash for the car and now he needs to sell it.

[wvf3]

Unless you have saved for a 1/3 downpayment and can pay the balance off in two years you may be ready to buy a car.
If you do before you are ready it will own you and not the other way around.
regards,
emoney

I don't think I could come up with 1/3 down and pay off in 2 years. I could probably come up with 20% and pay off in 4 years.

[wvf3]

I was checking out Capital One and they do have a "Custom Finance" program but it's only good for purchased made at dealerships. I don't understand that at all. Dealerships are more likely to sell you a lemon rather than an individual just looking to sell his car.

[HHM]

Yeah, with a private party sale, you are going to have a tough time getting financing. As was stated above, try a credit union or your bank. Most mainstream auto-finance outfits (even 2nd chance lenders), generally require the car to be bought from a dealership.

[wvf3]

Most mainstream auto-finance outfits (even 2nd chance lenders), generally require the car to be bought from a dealership.

Thanks for your reply. Why do you think that's the case?

[magyar123]

How good of a friend is he? How much does he still owe on the car/monthly payments? Ask him to make a contract with you, obligating you to make the monthly payments.

[emoney]

If you cannot pay for it in two years after paying 1/3 down you are buy too much car. Remember how much they go down in value. Keep your cars on a diet for your financial health.
Rich and smart people do not put money into assets that go down so much in value.
regards,
emoney