Classic Car Financing: A Step-by-Step Buying Guide

Buying a classic car can be a thrilling experience, but it can also be daunting, especially when it comes to financing. The good news is that there are several financing options available for classic car enthusiasts.

You can expect to pay a higher interest rate compared to financing a newer vehicle, typically ranging from 8% to 18% APR. This is due to the higher risk associated with classic cars.

Classic car financing often requires a larger down payment, usually 20% to 30% of the purchase price. This can be a challenge for some buyers, but it's essential to secure the best financing terms.

Classic car financing can be a bit more complicated than traditional car loans, but understanding the basics can help you navigate the process with confidence.

Classic cars are typically considered to be at least 25 years old, although some newer limited-release cars can also be considered classic if fewer than 25,000 pieces were produced.

The age of a classic car is a key factor in determining its value and the type of financing available. For insurance and registration purposes, a classic car is usually defined as being older than 20 years but not older than 40.

Classic car loans can go longer than standard car loans, potentially lasting seven to 10 years. This can be a concern for those on a tight budget, as the loan will take longer to pay off.

Interest rates on classic car loans can be higher than those on traditional used-car auto loans, although the rate can vary greatly depending on the lender and your creditworthiness.

To ensure you receive the best rate possible, it's essential to compare classic car loan interest rates from multiple lenders and use online calculators to help you make an informed decision.

Classic car loans often require a more substantial down payment due to the distinctive nature of these vehicles and the potential risk factors involved.

Here are some key points to consider when exploring classic car financing options:

To get a sense of your monthly payments, you can calculate them using a simple formula. You can also use a tool to calculate your payments, such as the one mentioned in Example 2, which asks "How much will my vehicle payments be?"

When deciding on a loan, consider structuring your payments to fit your budget. With competitive rates and terms up to 84 months, you can find a payment plan that works for you.

Shopping around for the best rate is one of the smartest things you can do when it comes to classic car financing. This is because interest rates can vary significantly between lenders, with some offering much more competitive rates than others.

According to the State of the Automotive Finance Market report, the average interest rate across all new car loans was 7.18% in the last quarter of 2023. However, classic car loan rates are typically higher due to the unique nature of the vehicles.

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To get the best rate, consider gathering loan offers from a few lenders that offer preapprovals. This is because shopping around can help you save thousands of dollars over your loan term, as suggested by LendingTree data.

The key is to compare the results and select the option that works best for you. For example, if you're looking to finance a $25,000 loan at 7.49% APR with a term of 3 years, your monthly payments would be $777.54 for 36 months.

Here's a comparison of classic car loans and new car loans to illustrate the difference in interest rates:

By shopping around and comparing loan offers, you can find the best rate for your classic car loan and save money in the long run.

Leasing a classic car may be a better financial option than buying one outright. Under this form of financing, you'll have to give the car back or buy it at the end of the lease.

Leases typically come with mileage caps, which can cost you if you drive over the limit. If you're planning to drive extensively, be aware of these caps and factor the potential costs into your decision.

At the end of the lease, you'll have two options: return the car or buy it outright. This is a key difference from standard loans, which allow you to own the car outright from the start.

If you're in the market for a classic car loan, transparency is key. Lenders that are upfront about their loan products, including available loan amounts, loan terms, interest rates, and down payment requirements, are a good place to start.

Collector Car Lending, for example, is one of the few lenders that consider applicants with less-than-perfect credit, making it accessible to a broader audience. Its minimum loan amount starts at $10,000, covering various car types, including those aged seven years or older.

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You should also consider lenders that offer competitive rates and flexible loan terms. Collector Car Lending offers terms up to 144 months with no prepayment penalties, providing borrowers with manageable monthly payments.

Some lenders to consider are Collector Car Lending, J.J. Best Banc and Co., Woodside Credit, LightStream, and Star One Credit Union. These lenders specialize in providing financing for classic cars and have been shown to provide reliable customer service.

Here are some key factors to consider when selecting a lender:

Keep in mind that classic car loans typically go longer than standard car loans, often in the range of seven to 10 years. This means you'll need to consider your budget for the coming years and whether this loan option is the best choice for you.

Your credit score is the single biggest factor in determining the interest rate you're given for a classic car loan. The higher your score, the better your chances of being approved and the lower your annual percentage rate (APR) will likely be.

You should check your credit score before applying for classic car financing to have a much better idea of where you stand with loan eligibility. This will help you determine the rate offers you may be provided with by classic car finance lenders.

A higher credit score increases the likelihood of receiving a more favorable interest rate. You can start by checking your credit score, which will give you a sense of the rate offers you may be provided with by classic car finance lenders.

The credit score needed to buy a classic car will vary by lender, but the stronger your credit score, the better your chances of being approved.

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Exploring financing options for classic car enthusiasts can be a bit overwhelming, but don't worry, we've got you covered. Most traditional auto lenders don't offer loans for vehicles over 10 to 20 years old due to valuation and reliability challenges.

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There are, however, specialty lenders that cater to classic car buyers by offering flexible loan terms and expert valuations. These lenders understand the unique value and market for classic cars, making them better suited for financing vehicles that traditional lenders often won't cover.

Some alternative financing options include using personal savings, which eliminates the need for interest payments, giving you full ownership. You can also consider a home equity loan, but remember, your home serves as collateral, adding a level of risk.

Here are some popular financing options for classic cars:

Classic car loans can have higher interest rates than traditional used-car auto loans, but rates can vary greatly depending on the lender and your creditworthiness. It's essential to compare classic car loan interest rates from multiple lenders and use online calculators to ensure you receive the best rate possible on your classic car loan.

Financing a classic car can be a bit tricky, but there are several options available. You can consider classic car loans, which typically go longer than standard car loans, potentially up to 10 years. This may not be the best option if you're on a tight budget for the coming years.

Classic car loans often have higher interest rates than traditional used-car auto loans, but the rate can vary greatly depending on the lender and your creditworthiness. It's essential to compare classic car loan interest rates from multiple lenders and use online calculators to ensure you receive the best rate possible.

Some lenders, like J.J. Best Banc & Co, offer loan amounts as high as $2 million, making them an excellent option for borrowers looking to finance rare or high-value classic cars. However, this lender may not be transparent about its interest rates and may require a higher down payment than other lenders.

LightStream is another popular online lender that offers flexible auto loans for purchasing classic and collector cars. They provide competitive rates and the ability to borrow substantial amounts, making it a top choice for financing high-value vehicles.

Here are some key features of LightStream's classic car loans:

If you're not eligible for a classic car loan, you can consider alternative financing options, such as using personal savings or a home equity loan. However, using your home as collateral adds a level of risk, and peer-to-peer lending platforms may offer more flexible terms than traditional banks.

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Understanding values is crucial when exploring financing options for a classic car. The value of a classic car is influenced by its condition.

A car's condition is a significant factor in determining its value, with well-maintained cars commanding higher prices. Market trends can also impact the value of historic cars.

Rarity is another key aspect that affects a classic car's value, with rare models being highly sought after by collectors. Authenticity and provenance also play a role in determining a car's value.

The price of the car is a critical factor in financing, and understanding how it's influenced by these aspects can help you make informed decisions.