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Classic Car Loans

19 Oct

It may be your dream to purchase a classic car, but you may have trouble finding the best car loan. Classic cars present a unique challenge, as it can be difficult to find a loan for an older car. Finance companies and banks typically provide different terms for new versus used cars, not taking into consideration that a classic car is much more than a “used” car.

Steps before you buy

If you are just starting your shopping for a classic car, the first place to start is by looking for a car title loan. Contact your current bank or finance company, if you already have an existing relationship, to see what terms and conditions they offer for classic cars. Make sure the car will be viewed differently than just being labeled as a used car, as a classic car will have a higher value than indicated by just the year and model. After you have researched what your bank can offer, start shopping online or by phone with companies that specialize in classic car loans. There are a number of companies that recognize antique, exotic, classic, muscle, or hot rod cars as being unique, offering longer terms and lower rates than typically offered by banks for used cars. These companies are knowledgeable about the classic car market, helping you obtain financing for most cars, even those dating back to 1900.

Companies who specialize in muscle car loans understand that you may not have located your dream car yet, that you are simply obtaining pre-qualification before you shop. Once you are pre-qualified, you will usually have 30 to 60 days to find your car, without having your pre-approval terms change.

Enhancing your classic car’s value

If you are working on your classic car, your car’s value will change over time. Make sure you periodically review your car’s current value with both your insurance company and your finance company. When your car’s value increases, you may be able to renegotiate the terms of your loan to get more attractive financing.

Advantages of speciality loans

There is a new alternative available in the finance market. Extended-term financing is now available for collectors who want to buy a classic, antique, or special interest car. Companies specializing in these loans understand the market, such as why an older car might cost considerably more than a typical new car. Interest rates are typically lower, and loan terms can be as long as 12 years, which is unheard-of with traditional auto loans, helping keep your monthly payments low and affordable.

Local banks usually don’t understand that there is a difference between a classic car and a used one. If they are able to approve any financing at all, the maximum term is usually 36 months or less, and the interest rate can be as much as double that of a new car loan. Classic car loan specialists can sometimes even help you determine if other avenues are more appropriate for your financing needs, including using personal savings, home equity loans, personal loans, or unsecured lines of credit.

Loans to improve your car

If you already own your classic car, whether it is owned free-and-clear or still under financing, you might want another loan to pay for upgrades and enhancements. Classic car loan specialists are able to offer flexible financing for this situation, giving you a variety of programs and terms to choose from. These loans usually don’t have any prepay penalties, end of term disposal fees, or other costly residual values. Some classic car auto loan companies offer a locating service, helping you find the exact car you want through their network of contacts. All of these services are designed to allow the buyer to trade classic cars more easily and with less expense.