Learn Where to Get Your Dream Car Financed
The cost of a classic car might be extremely high. But unlike other cars, they also frequently increase in value, making them a wise investment. But surprisingly few classic automobile enthusiasts think about getting a loan to pay for their passion and investment.
Although it can be challenging, getting a loan for a historic car is not impossible. You may try your neighborhood bank or credit union, the lender with whom you have a mortgage on your home, or the one who has provided financing for all of your regular vehicles. These are consistently good places to begin. However, you can discover that they have no experience lending for the acquisition of historic cars and have no knowledge of the market for these types of vehicles. You’ll need to broaden your search if that is the case.
Find a Specialty Lender
Fortunately, there are a number of lenders out there who focus on financing historic cars and other exotic vehicles, just like there are with insurance. In fact, they might be your only choice. Companies such as J.J. Best Banc and Co., Woodside Credit, and Dupage Credit Union all specialize in classic, antique, and exotic vehicle loans. There are many more people like them. Ask your friends who have financed their dream cars or look online.
The good news is that there are a number of lenders out there who focus on providing financing for classic cars and other exotic vehicles, similar to the insurance industry. They might be your only choice, to be honest. Companies such as J.J. Best Banc and Co., Woodside Credit, and Dupage Credit Union all specialize in classic, antique, and exotic vehicle loans. They are many in comparison. Consult online resources or talk to your acquaintances who have funded their ideal vehicles.
Asking your acquaintances at auto shows—perhaps not complete strangers!—who they used to finance their purchase is another useful strategy for locating a specialized lender. They could be able to give you the most honest response since they don’t want to lose your business.
Classic Car Loan Requirements
A traditional loan’s conditions and procedures are similar to many of those for vintage car loans. There are, however, a few notable exceptions. Of course, you will need to fill out an application, and just like with any conventional or non-traditional auto loan, the lender will examine your credit report and history to see if you can afford the payments.
Before requesting a loan, be sure to take care of any issues with your credit history because all finance companies are in the industry to maximize profits and reduce risk exposure. If you don’t, you’ll likely face a higher interest rate or maybe rejection.
Be Smart About It
To be able to afford a historic car is quite different than simply wanting one. In other words, you need to determine your budget and how much you can actually afford to pay each month. If you’re on a tight budget, you shouldn’t acquire a classic car.
A minimum of 10% (and most commonly 20%) of the vehicle’s purchasing price must be put down as a down payment. Remember that your interest rate will be lower the more you can afford to pay upfront. A classic automobile loan duration can last up to seven or ten years, as opposed to the five to seven years of a conventional car loan.
Consider the shorter term option if you have the financial means to repay the payments during a shorter loan term, such as three or five years. A loan with a shorter term will probably be advantageous for you since they often have cheaper interest rates.
Leasing a Classic Car Instead of Buying
Leasing a classic car is an option as an alternative to an outright purchase, just like with a regular car. With a lease, the “residual value” of your potential purchase will be decided upon by you and your lender. The residual value is the lowest amount your vintage will be worth at the conclusion of the lease.
The difference between the price of the car and its residual value will subsequently be loaned to you by the lender. When the lease period is up, the lender will receive the vehicle back and resell it for the residual value. At that point, if you want to keep the car, you can either buy it from the lender or possibly sign a new lease.
When compared to buying, leasing might be a great compromise, especially if you enjoy the concept of switching out your vintage car every few years. Just keep in mind that if someone else finances your historic car, you’ll likely need to buy top-notch insurance.
The Bottom Line
Whether you choose to lease, borrow, or pay cash for your antique car, you will be taking on a hefty financial obligation. Classic car fans are passionate about their cars, but when it comes to making the purchase of your dreams, you must let your feelings rule your decisions. To verify you are getting the car you think you are, have an expert or you inspect it before you buy. And no matter how much you might have fallen in love with a classic car, never finance one that you can’t actually afford. If you get behind on your payments, that affection will go in a moment.