Buying from a private seller can give you access to vehicles that are not being sold through a dealership, but arranging the purchase can involve some extra checks. Private-sale car finance may be available depending on the lender, vehicle and your application. Before proceeding, it is particularly important to check the vehicle itself, whether a security interest is registered against it and who you are actually buying it from.
Key takeaways
- ✓Private-sale car finance may be available depending on the lender, vehicle and individual application.
- ✓Buying privately generally gives you fewer consumer protections than buying from a registered motor vehicle trader.
- ✓Check the Personal Property Securities Register before buying to identify registered security interests over the vehicle.
- ✓A private seller does not have to provide the Consumer Information Notice required from motor vehicle traders.
- ✓Consider a professional pre-purchase inspection rather than treating finance approval as evidence that the car is mechanically sound.
- ✓Both the buyer and seller must notify NZTA when the vehicle changes hands.
Can you finance a car from a private seller in NZ?
Potentially. Car finance does not necessarily require the vehicle to be purchased from a dealership. Whether a private purchase can be financed depends on the lender's criteria, the vehicle and the individual application.
Private-sale car finance can be possible, but the lender may require additional information or checks before funding the purchase.
How is a private car purchase different from buying from a dealer?
The biggest difference is not necessarily the finance itself but the protections and purchase process. New Zealand Consumer Protection says private sellers do not have to be registered motor vehicle traders, provide a Consumer Information Notice, or comply with the Consumer Guarantees Act in the way a dealer does.
| Private seller | Motor vehicle dealer |
|---|---|
| Does not have to provide a CIN | Used vehicles must have the required CIN |
| Fewer consumer protections apply | Dealer obligations provide additional protections |
| Buyer should carry out their own vehicle and security checks | Dealer has additional disclosure and legal obligations |
Check whether money is owing on the car
One of the most important checks in a private purchase is whether there is a registered security interest over the vehicle. Consumer Protection warns that a vehicle bought with money still owing can potentially be repossessed if a valid security interest applies.
Search the Personal Property Securities Register before completing a private car purchase. A PPSR search can help identify a registered security interest over the vehicle.
What information can be used for a PPSR vehicle search?
Consumer Protection says vehicles can be searched on the Personal Property Securities Register using identifying information such as the registration number, VIN or chassis number. Do this before completing the transaction rather than relying only on what the seller tells you.
What if the private seller still owes finance?
If a valid security interest exists, do not assume paying the seller automatically clears it. Consumer Protection recommends going back to the seller and having the outstanding debt dealt with. The purchase and finance should not be completed until you understand how the existing security will be cleared.
Does the private seller have to provide a CIN?
No. Consumer Information Notices apply to used vehicles sold by motor vehicle traders, but private sellers do not have to provide one. This makes your own checks particularly important when buying privately.
Do not expect a private-sale vehicle to come with the same CIN disclosure you would see when buying a used car from a dealer.
Check the seller as well as the car
Consumer Protection recommends obtaining the private seller's name, phone number and address. Keeping the seller's details and copies of the advertisement, messages and statements about the vehicle can also be useful if a dispute later arises.
Should you get a private-sale car inspected?
A professional pre-purchase inspection can help identify mechanical or safety issues that may not be obvious during a short viewing or test drive. Consumer Protection recommends considering a professional inspection when buying a used vehicle.
Finance approval is about the credit transaction. It should not be treated as confirmation that the vehicle is mechanically sound.
What should you check before buying?
A private-sale purchase deserves a broader check than simply confirming the asking price.
| Check | Why it matters |
|---|---|
| PPSR | Helps identify registered security interests |
| Vehicle history | Can reveal information relevant to the vehicle's past |
| Seller details | Helps confirm who you are dealing with |
| Pre-purchase inspection | Can identify mechanical or safety problems |
| WoF | Check the vehicle's current inspection status |
| Vehicle licence | Check the current licensing status |
| Test drive | Allows you to assess how the vehicle drives before purchase |
What are the WoF rules when buying a vehicle?
NZTA says a buyer can insist that the WoF on a light vehicle is less than one month old. If the buyer does not insist on this, NZTA says the buyer should confirm in writing that they accept a WoF that is more than one month old.
How does the finance process work for a private purchase?
The exact process depends on the finance provider. Generally, the lender needs information about you, the amount being borrowed and the vehicle being purchased. Private-sale transactions can require additional checks before funds are released because there is no motor vehicle dealer managing the transaction.
Does the car have to meet lender requirements?
Potentially. Where the vehicle is relevant to the security for the loan, factors such as its age, value and suitability can affect whether the lender will finance the purchase. Approval therefore depends on more than simply finding a willing private seller.
When should you pay the private seller?
Avoid assuming the purchase is complete before the finance provider has confirmed its requirements. The lender may have a specific funding process for private purchases. Make sure the vehicle, seller and any existing security interests have been checked before money changes hands.
Who needs to tell NZTA about the sale?
NZTA says both the buyer and seller are legally required to notify it when a vehicle changes hands. The buyer should complete the buyer transaction and the seller should complete the seller transaction at the time of sale.
Changing the registered person with NZTA is required, but NZTA specifically notes that being the registered person is not the same thing as establishing legal ownership.
Is buying privately cheaper than buying from a dealer?
A private seller may offer a lower purchase price, but price alone does not determine whether it is the better purchase. Consider the condition of the vehicle, finance costs, inspections, any immediate repairs and the reduced consumer protections associated with a private transaction.
Private-sale car finance checklist
Before completing the purchase, make sure the vehicle and transaction have been checked as carefully as the finance.
| Before you buy | Check |
|---|---|
| 1 | Confirm the vehicle and seller details |
| 2 | Search for registered security interests |
| 3 | Check vehicle history and inspection information |
| 4 | Consider a professional pre-purchase inspection |
| 5 | Confirm the lender's private-sale requirements |
| 6 | Read the finance agreement and understand the rate, fees and repayments |
| 7 | Complete the required NZTA change-of-registered-person process |
Compare finance for a private car purchase
The finance available for a privately purchased vehicle depends on the lender, vehicle and individual application. EveryLoan refers visitors to Simplify Finance, where applications, lender matching, credit decisions and funding are handled by Simplify Finance and its lender partners.
EveryLoan is not a lender. Private-sale vehicle eligibility, approval, rates and loan terms depend on the lender and your individual application.
Frequently asked questions
Potentially. Private-sale car finance can be available depending on the lender, vehicle and individual application.
You can search the Personal Property Securities Register for a registered security interest over the vehicle before buying it.
No. Private sellers do not have to provide the Consumer Information Notice required for used vehicles sold by motor vehicle traders.
A professional pre-purchase inspection can help identify mechanical or safety problems before you commit to the purchase.
Yes. NZTA says both the buyer and seller must notify it when a vehicle changes hands.
No. NZTA states that the registered person recorded on the Motor Vehicle Register is not the same thing as legal ownership.