Posts Tagged ‘antique car loan’

Collector Car Loans – Why Most Lenders Won’t Touch Them!

Most conventional lenders are reluctant to make collector car loans, even though buying an antique or collector vehicle is a smarter financial decision than buying a new vehicle.  The biggest reason many lenders do not offer collector car financing is that a collectible vehicle is very difficult to place an accurate and reliable value on.  With a new vehicle 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 vehicle, there are way too many variables for many lenders to deal with.

For instance, is the vehicle 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 vehicle?  Is it really a Chevelle Super Sport, or a mundane Malibu that someone has swapped engines in and added emblems to?  Did the vehicle 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 a collector car loan.

The bottom line for the lender 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) vehicle, 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 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 vehicle, or they just don’t offer collector car financing at all.

When looking for collector car financing, it is best to seek out lenders that specialize in these types of loans, 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 vehicle loans.  These lenders are familiar with the collector vehicle market, and will understand why a 50 year old vehicle could be worth $50,000 or even much more.

To learn more about collector car loans, go to my page on 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.

Antique Car Financing – 3 Benefits of Using a Specialty Lender

Antique cars can be good investments if you choose wisely.  If restoring or driving antique cars is your hobby, you can get a return on your investment and enjoy yourself doing it!  There aren’t very many other “toys” out there that can earn their keep; most hobbies require you to invest in depreciating assets (Jet skis? Pleasure boats? ATVs or other off-road vehicles? Hunting, fishing…you get the picture).  Antique cars in general will hold their value at the very least, and in most cases will appreciate as time goes by, instead of depreciating in value or getting “used up”.

If you are thinking about purchasing an antique vehicle, using cash is the safest way to do it.  However, an argument can be made for antique car financing when you look at the “opportunity cost” of having all that cash tied up and unavailable for other investments.  You may be able to get an antique car loan and pay less interest than your money could be earning elsewhere.  Most likely though, you would need to get that financing from a company that specializes in antique car loans for it to work.  There are several different benefits to using a company that specializes in collector car financing.

 
Benefit #1 – Less time/Less hassle: You could spend a lot of time trying to find a conventional lender that will provide an antique car loan.  Most normal lenders will not provide antique car financing for several different reasons. It mainly boils down to them not knowing the antique and collector vehicle market well enough to make a wise decision on how much a particular antique vehicle is worth.  There are just too many variables for them to analyze, and the time they would have to spend to make an informed decision just isn’t worth the return they would get from the loan.

 
Benefit #2 – Lower Interest Rate: If you do find a conventional lender that is willing to give you an antique car loan, they likely will have a higher interest rate than a company that specializes in classic car finance.  The conventional lender will likely quote you an interest rate that they give to the typical used vehicle buyer.  They will classify your antique as just another old used vehicle, which assumes that it will be worth less in the future than it is now.  Companies that specialize in classic auto financing realize that your collector vehicle will likely hold its value or increase in value, and they lower the interest rates accordingly.

 
Benefit #3: Longer Terms: Most used vehicle loans have terms of 3-5 years.   A company that specializes in classic car finance understands that an antique car purchase is an investment, and they can offer you up to twelve year terms!  That will lower your monthly payment significantly, and can allow you to purchase a much higher priced vehicle than you could with a conventional lender.

 
Those are the top three benefits to using a company that specializes in antique car financing.  You can save a lot of time and hassle, get a better interest rate, and spread out your payments over a much longer time period.  Just being able to talk to a person that understands what you are doing and why you are doing it goes a long way also.  Search out lenders that specialize in antique car loans, and you will find they have a lot to offer.

To learn more about the benefits of antique car financing, visit my page on Classic Car Financing.  For more details on what to expect when applying for an antique car loan, take a look at Classic Car Loans.