buying private owner car with pre-approved loan... process?

[Scott90]

Hello everyone... this question isnt for me, but for my younger brother.

He wants to purchase a car, and I am thinking about getting him to become a member of NFCU (im active duty) so he can try to get one of their low interest auto loans.  This will be one of his first cars (thats not a total POS) so we were thinking about a 5k loan.  Anyways, ideally I would like for him to purchase from a private seller.  Is this possible to do with a pre-approval from a bank/credit union? What is the process for this, what would he have to do/the steps?

Thanks in advance for some guidance on this, I appreciate all the help that is given on this forum. 

[notfancy]

HI there, it is fairly unlikely that they will approve it, unless they are approving it as a signature loan. If they consider it an "auto loan" they'd have the ability to put a lien on the vehicle to ensure payment, which you can't really do with a private sale.

[Remember0]

I disagree with notfancy.

Plenty of CUs do loans on private party. Local CUs and banks definitely do. One of my non-local CUs also does (PSECU... https://www.psecu.com/vehicles/ see the second FAQ question)

Also if you have the cash upfront, most CUs will be willing to let you send in the title later and give you a loan (again, I KNOW for a fact PSECU does do that).

Call your CU and talk to them. That's the best way to address this question. If they say no, call a couple local ones/maybe DCU and see what they say.

PS: Unfortunately, no, you can't sign up for PSECU unless you live in PA or your family/someone you live with is already a PSECU member (the loophole closed years ago). On a side note, can I mention how glad I am that they accept under 18 members to sign up without anyone else cosigning for membership/checking (the loophole closed before I turned 18 lol).

[Lechte]

CU's offer Auto Loans for private sales.  They hold the title until it is paid off. 

[Scott90]

Thank you... does NFCU offer one of these loans?  I couldnt find any information about this on their website. 

[notfancy]

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@Remember0 wrote:

I disagree with notfancy.

Plenty of CUs do loans on private party. Local CUs and banks definitely do. One of my non-local CUs also does (PSECU... https://www.psecu.com/vehicles/ see the second FAQ question)

Also if you have the cash upfront, most CUs will be willing to let you send in the title later and give you a loan (again, I KNOW for a fact PSECU does do that).

Call your CU and talk to them. That's the best way to address this question. If they say no, call a couple local ones/maybe DCU and see what they say.

PS: Unfortunately, no, you can't sign up for PSECU unless you live in PA or your family/someone you live with is already a PSECU member (the loophole closed years ago). On a side note, can I mention how glad I am that they accept under 18 members to sign up without anyone else cosigning for membership/checking (the loophole closed before I turned 18 lol).

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Wow, this is very nice to know! I certainly am happy being wrong in this case! Thank you for correcting me. Credit unions really are the way to go sometimes!