Most conventional lenders are reluctant to make an antique car loan, even though buying an antique or collector car is a smarter financial decision than buying a new car. The biggest reason many lenders do not offer collector car financing is that a collector car is very difficult to place an accurate and reliable value on. With a new car or one that is less than 20 years old, it is much easier to nail down an accurate market value. With an antique or collector car, there are way too many variables for many lenders to deal with.
For instance, is the car all original or has it been restored? If it has been restored, what is the quality of the restoration like? Is it unique or rare in any way? Is it a popular car with a wide fan base such as a first generation Camaro, early Mustang, or Mopar E-Body, or is it a more obscure (but rare) model that would only be worth a considerable amount of money to a relatively small group of collectors? Has it been modified, and if so, how do the modifications affect the value of the car? Is it really a Chevelle Super Sport, or a mundane Malibu that someone has swapped engines in and added emblems to? Did the car once belong to a celebrity, or is it a vintage race car that won some famous races? These kinds of questions will make a normal loan officer’s head spin, but all of these factors will come into play when you are applying for classic auto financing.
The bottom line for the classic car finance provider is, “If the borrower defaults on the loan, how easy will it be for us to sell the vehicle and get our money back for it?” With a new (or late model used) car, there are enough “data points’ for a lender to get a relatively accurate and reliable picture of what they are up against if the borrower defaults on the loan. With a 1957 Desoto Adventurer coupe, there aren’t a lot of data points to compare to. Even for a more common classic car, such as the ubiquitous 1969 Camaro, the values vary so greatly due to the options, condition, and modifications that a typical lender just isn’t well-enough informed to make a good decision. So they bump up the interest rates to cover their losses in case they overestimate the value of the car, or they just don’t offer collector car financing at all.
When looking for collector car financing or classic auto financing, it is best to seek out lenders that specialize in classic car finance, or at least have an antique car loan program. These lenders will most likely be able to give you a better interest rate and/or a longer loan term than you will get with lenders who concentrate on newer car loans. These lenders are familiar with the classic car market, and will understand why a 50 year old car could be worth $50,000 or even much more.
To learn more about collector car financing, go to Classic Car Financing. To get more information on the “nuts and bolts” of getting an antique car loan, take a look at Classic Car Loans.
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Muscle Car Insurance Companies – Top 4 Points to Consider
April 5th, 2010
Owning and driving a classic muscle car can be a very enjoyable (although expensive!) hobby. If you own and drive a vintage or collector car, then specialty muscle car insurance is one thing that you really need to consider. If you are insuring your muscle car with the same company that provides you with the insurance for your “everyday driver”, you may be paying too much for coverage that is woefully inadequate should you need to file a claim. It is best to get your muscle car insurance from a specialty provider. They can offer insurance that is tailored to your needs and most likely save you a considerable amount of money, too.
Most standard car insurance policies are written for “Stated Amount” or “Stated Value”. These policies don’t take into account the value of your car as a collector vehicle, and actually will assume that the vehicle depreciates with time. If you own a muscle car, you need to make sure you get an “Agreed Value” policy. With an Agreed Value policy, you and your insurance provider come to an agreement on your car’s value when you begin the policy. The insurance company will then reimburse you the Agreed Value of your car in the event of a complete loss, and give you much more reasonable options in the event of repairable damage.
When choosing a specialty insurance provider, you also want to make sure they are underwritten by a company that is financially solid. A.M. Best is the leading provider of ratings for insurance companies, and assigns each insurance company a “grade”. You want to use a muscle car insurance provider that has an A.M. Best rating of “A-” or higher. Ask who the underwriter will be for your policy, and then look up their rating on the A.M. Best website.
Many insurance policies don’t allow for the cost of OEM parts for collision repair. Using aftermarket replacement parts could detract from the value of your classic car. Most specialty insurance providers cover the cost of using OE (or OE-licensed) repair parts. Make sure that the insurance policy you choose will cover this cost.
If your 1964 Impala Super Sport gets damaged, do you want “Quick-O Paint and Body” to do the repairs, or do you want to take your car to a shop that specializes in antique car restoration? A “normal” insurance policy may only cover the cost that “Quick-O Paint and Body” charges, and you would be responsible for the cost difference if you choose to use a specialist that charges more. Find out if the insurance policy you are considering allows you to take your car to the repair shop of your choice.
Those are the first four things to consider when choosing a muscle car insurance company: 1) Agreed Value policy, 2) A.M Best rating of A- or better, 3). Coverage for cost of OE parts, and 4) Coverage for repair shop of choice. There are a number of companies out there vying for your insurance business. Using these four criteria will help you narrow down the list of possible providers for your muscle car insurance policy.
Once you have the four criteria above covered, it is time to get into the details! Take a look at American Classic Car Insurance for a complete list of all the points you need to consider when getting insurance quotes for your classic muscle car. For a directory of the most popular classic car insurance providers, go to Classic Car Insurance Companies.