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In PE, what should I know about private sale financing for car loans?
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Car Loan Glossary • pe

In PE, what should I know about private sale financing for car loans?

Financing a private car sale in Prince Edward Island through Canadian banks or credit unions is certainly an option, though it requires a more rigorous process than purchasing from a licensed dealership. Lenders will typically mandate a comprehensive independent mechanical inspection to verify the vehicle's condition and safety, alongside a crucial lien search through the Personal Property Registry (PPSA) to confirm there are no outstanding debts or encumbrances attached to the vehicle. They will also assess the car's market value, often considering age and mileage restrictions, to ensure the loan amount is appropriate for the asset.

A key provincial nuance in PEI is that buyers are responsible for paying HST (15%) on the purchase price of a used vehicle, even in a private sale, which must be factored into your total budget and paid upon registration at Access PEI. This detailed due diligence matters significantly for the consumer, as it protects you from inheriting unforeseen mechanical issues or prior financial obligations, ensures you obtain clear title to the vehicle, and provides a complete understanding of the true total cost, including taxes and registration fees, before finalizing your loan and purchase.

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