4 Tips to Successfully Finance a Vintage Car

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Classic cars never go out of style, but for all their attractive qualities, they can be difficult to finance. That’s because if you’re seeking to own a vintage vehicle, getting a loan involves more than just the money.

You’ll likely need a bigger loan, of course, both because these beauties are often valued at more than a new car and because the collectible may require some repairs or refurbishing, but you’ll also have to meet certain loan restrictions. This can be a complicated process for the uninitiated.

If you’re thinking about financing a vintage car, a little insider know-how can ease the process … and we can assist you with this. Study the following four tips and you’ll be the owner of your classic dream car in no time.

1. Consult a Specialty Lender

One of the most common barriers for classic car buyers is the restriction some banks place on lending for vintage cars altogether, which is why you should start your search with a specialty lender. Finding a trusted specialty lender can streamline the entire process, because these outfits have considerable background knowledge about the valuation of vintage cars.

If you’ve got these experts on your side, their team will help you feel more certain you’re getting what you pay for.

2. Skip the Big Banks

Now, you might wonder why a big bank would be unwilling to lend money for a vintage car. To understand their position, it’s helpful to examine the matter using the example of older, used vehicles as opposed to a vintage car purchase.

Bank of America, for example, won’t lend money for cars that are older than 10 years. It doesn’t want to lend money to anyone for a used car because there’s an assumption that’s all they can afford.

If the vehicle breaks down shortly after the loan and purchase, that’s a bad investment. A specialty lender, however, will be perfectly aware that it’s assisting the funding of something that has significant value as a collector’s item, not just an aging junker.

3. Take the Added Costs into Account

When you take out a loan on a vintage car, it’s a smart move to borrow more than the asking price. That’s due to the odds you’re also going to have to pay for repairs and refurbishing.

How much above asking price you’ll need, however, depends on how handy you are. If you can work on and maintain the car yourself, you can obviously borrow a smaller amount above the sale price, while new owners who will have to take their vintage car to the shop will naturally want to borrow a larger sum.

4. Run The Insurance Numbers

All cars require insurance coverage, but vintage cars typically carry higher insurance costs. Certain high-demand cars cost thousands of dollars a year to insure.

You need to be sure you are willing and able to absorb that level of expense before you shell out for a vintage car; plus, make sure the insurance is for a guaranteed amount. It’s easy to get cheated in the insurance market when you have a classic car.

It’s also worth noting that insurance premiums have been on a rapid uptick recently. Unlike repair costs or depreciation, it’s hard to predict how your rates will change in the next few years; and if your vintage car is mostly a showpiece, you may not want to shell out thousands on insurance when there’s no certainty about how high that rate will go during your ownership.

Owning a vintage car is a classy investment, and for many people, it’s a lifelong dream. Think you’re ready to take the leap? Then run the numbers and get that lender on board.

It may take some time to locate the perfect vehicle, but you’re in for an exciting ride.

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