PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
Are private-party car loans always more expensive than dealership loans?
"I got pre-approved for a 36-month loan at 3.9%. But when I went to the bank to get the cashier's check, they told me that because I'm not buying from a dealer, my interest rate would change.
With a credit score of 680, they told me that they could give me a loan to buy from a private seller, but the rate would be 16.5%. To me, this seems ridiculous."
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“The risk of buying from a private seller is higher in the eyes of the lender, and that’s why 99% of private-seller car loans have a higher interest rate.
In your case, the jump from 3.9% to 16.5% seems to be a bit much. The question you have to ask is whether they’re giving you a car loan or a personal loan.
If your lender didn’t ask you for the vehicle identification number (VIN), proof of insurance, or the title, chances are that they gave you a personal loan, which would explain the high interest rate.
Before you sign for this loan, go back and ask what type of loan it is. If it’s not a car loan, ask them if you can apply for one. If not, you should definitely look elsewhere, as you can almost certainly find a better rate, even with your credit score.”
View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies