How to Get Classic Car Financing
If you’re looking to drive off in a shiny red convertible or spunky coupe, you may need to use classic car financing to buy the car of your dreams. Traditional auto loans may not work for your classic car purchase, since classic or collector cars are usually older than an average car purchase.
The process is similar to getting a loan for any other vehicle, but you’ll want to look for a lender that offers financing for a classic car.
How to finance a classic car in four steps
- Check your credit score. Before you start applying for financing, check your credit score to get a sense of the rate offers you might receive from lenders. You may be able to improve your score and, thus, the APR offers you receive.
- Find a classic car lender. Classic car buyers often use specialized classic car lenders that will properly value a car that could be older than the owner. You can also shop for rates from traditional auto lenders to make comparisons
| Classic Car Lender | Estimated APR | Terms | Limits |
|---|---|---|---|
| J J Best Banc & Co | Not disclosed | Up to 84 months | Model years to 1900 |
| LightStream | 7.49% to 16.44% (with AutoPay) | Up to 84 months* | $5,000 to $100,000 |
| Putnam Leasing | Not disclosed | 24 to 60 months | $75,000 to $1,000,000 |
| Star One Credit Union | 6.45% to 10.45% | Up to 84 months | Up to 80% of book value |
| Woodside Credit | 6.54% to 6.71% | Up to 180 months | $20,000 to $800,000 |
(*Payment example: Monthly payments for a $10,000 loan at 3.99% APR with a term of 3 years would result in 36 monthly payments of $295.20.)
- Make a down payment. A down payment lowers the amount you finance — which reduces your monthly payment and the overall cost you pay for the car, due to paying less interest. Classic car loans may be structured with down payments up to 20%, while other lenders may not require a down payment.
- Buy car insurance. Every car must carry some level of car insurance, depending on where you live. For your collector car, you may need specialized classic car insurance. Traditional (or stated-value) car insurance is based on the market value of the car, which may not take into account the actual value of an older car or the extra costs to repair it. Collector car insurance, on the other hand, is based on an agreed-upon value. You can get lower premiums by limiting the miles you drive the car each year, though you can also insure it for daily driving. The insurance may also provide roadside assistance, which could come in handy with an older car.
Alternatives to classic car loans
There are other ways to finance your classic or older used car that could be better alternatives depending on your financial situation.
Personal loan
You might be able to use a personal loan to finance a classic car. A personal loan is based on your credit score and income, and may have lower rates than other forms of finance like a credit card. A secured personal loan could use your classic car as collateral, while an unsecured loan doesn’t use collateral but may have higher rates.
Home equity loan
You could also consider a home equity loan for classic car financing. A home equity loan is a loan that lets you use the equity in your home for other purposes. You’ll receive a specific amount of money, which must be repaid during a fixed term.
A home equity loan may enable you to finance a more expensive car than you could with an auto loan or personal loan, depending on the equity in your home. However, if you don’t pay this loan, your house could be repossessed. Use an auto loan calculator and a home equity loan calculator to compare the options.
Classic car lease
Instead of buying a classic car, leasing one could be another option. Like any other car lease, classic car leasing payments are based on the value of the car at the end of the lease. When the lease expires, you can buy the car outright; sell it or trade it in and pay off the lease value; or roll over into another lease. You may be able to afford a more expensive classic car and have less money invested without a down payment, as you might have to with a loan. You could also get shorter terms or change cars during the lease to enjoy different classics.
Frequently asked questions
Is it harder to get a loan for a classic car?
Depending on the age of the car, you may have more luck with a specialized classic car finance company than a traditional auto loan.
How long can you finance a classic car for?
You can finance a classic car for up to 15 years with some lenders.
What credit score do you need to buy a classic car?
Like any other financing, the best rates are offered to those with a FICO score of 661 or higher, considered a prime credit score.