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Can I get car finance for a private car sale?

If you’re looking to buy a car privately, the team here at Zuto can help. We work with a number of lenders who are able to offer private car finance. Some of our lenders may require additional information, including details from the seller, but this is something our team will discuss with you during the process.

How is buying privately different from buying from a dealership?

The biggest difference between buying a car privately and through a dealer is that, with private car finance, you have less protection if you’re unhappy with the car or anything goes wrong once you’ve bought it. 

A dealership might offer a guarantee which protects you for an agreed period in case something goes wrong with the vehicle, but you won’t have the same assurances when buying privately.

On the plus side, used cars bought privately are often cheaper than those bought from a dealership. This is because private sellers aren’t usually looking to make any kind of profit on the sale. Discover more about buying a car privately or finding used car finance.

How to buy a car on finance

When you buy a car on finance, you can choose between a PCP finance quote and HP finance. In both cases, the finance is secured against the vehicle, which you won’t actually take ownership of until the final repayment is made. You’ll still get all the legal documentation for the car, and will be shown as the vehicle’s registered keeper on the V5C, but the finance company will own it.

The terms of a car finance arrangement mean you can return the car to the lender if you’ve repaid 50% of the finance. If you want to return the car before you’ve repaid 50%, you’ll need to make up the difference. If you return the car after paying more than 50% of the finance, you won’t be given any refund.

Can you finance a private car sale?

There are a number of ways to finance a private car sale:

  • Use your savings - If you’ve got money in the bank, you can use this to fund all or part of the purchase of a car. This means the car will be yours outright and you won’t owe any money to a lender or finance provider.
  • Use a personal loan - If you don’t have the money in the bank, you can get a loan from a bank or lender to buy a car. You will receive a lump sum from the lender to pay for the car, which you’ll then pay off over a set period of time. These loans are usually unsecured, which means you don’t need to use the car as security, but the lender may still be able to repossess the car as part of any debt recovery action if you don’t keep up with repayments.
  • Use car finance - If you’re looking to buy a car on finance, you’ll usually do this with a hire purchase agreement (also known as HP finance). This is similar to a personal loan in that you make regular monthly repayments to the lender. Where HP differs from a loan is that the money you borrow is secured against the vehicle, meaning you don’t own the car until the private car finance is fully paid off.

Before applying for a loan or car finance, it makes sense to work out how much you can afford to borrow and what monthly payments you can reasonably manage. Our car finance calculator can help with this. It can even show you how much car finance for a private sale you’ll likely be able to borrow based on your credit rating.

Zuto is a credit broker, not a lender. Representative 20.9% APR.

Can you sell a financed car?

You can’t sell a car that has outstanding finance to be paid, as you don’t actually own the vehicle until the final repayment has been made. Once you’ve made all of the necessary repayments and have become the car’s registered owner, though, you’re free to sell it. 

If you sell a financed car, the lender will still expect the regular repayments to be made and might repossess the car if these payments are missed. If there is still outstanding finance left once they’ve recovered the car, they can take you to court to get it back. Find out more in our guide to changing a car with outstanding finance.

Get advice on your private car sale

If you’re planning on taking out car finance for a private sale, it’s important to consider all possible avenues, taking your financial circumstances into account. Get in touch with our team of experts, and we’ll talk through your finance options.


At Zuto, we offer a free vehicle history and valuation check for all our customers. However, we still recommend you get the car fully checked over by a qualified mechanic before purchasing, to ensure it doesn’t cause you any problems further down the line.

Written by

Mike Barlow

Content Manager

Mike has worked at Zuto since 2018 and uses his experience within the industry to help customers understand the ins and outs of car finance.

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