We get it, you have this deep and burning for that classic car you’ve wanted all of your life, and it could turn into an incredible investment if you choose your car wisely. You could make some serious money over time as the classic increases in value. But can you get a loan, and if so, what’s expected from you to qualify for these loans?
We have answers.
In theory, it’s a fairly simple process to secure a loan on a classic car, but in reality, it’s a bit more complicated for some and even burdensome for others, while some can make a call, sign some paperwork and they’re done.
What makes the difference?
In reality, when you are dealing with lending institutions, rules and policy rule the outcome of any application for a loan on classic cars. Let’s dive in and layout the details of what you’re up against when finding a financial institution to cut that check.
The first thing you must understand is almost any lending institution will have standards for acquiring a loan for older cars, and each one has different requirements.
If you have excellent credit, getting that loan should be fairly easy. But what are the standards of good credit for a 40k classic car?
A credit score of over 700 is a good start if you want a full loan. Over 750 with excellent debt to income ratio is a major plus. Past high credit limits with an excellent repayment history is a must unless you want to lay a large down payment on the table. Assets that are clear of lien holders, such as real estate, stocks, and income streams help you get approved anywhere.
If your credit and financial situation are good enough, a personal loan is an option.
If your credit is excellent, your interest rates will likely be lower, making it more affordable and more easily attained.
Down payments of over 20% make attaining the loan you’re after much easier if you are not as stout as others. If you have bad credit, the odds of getting that loan will be much harder, even if you have assets as collateral. Most banking institutions will not finance al older car, and if your credit is bad, you will likely fail to attain the loan.
Companies That Specialize In Classic Car Loans
There are financial institutions that specialize in classic car loans. The trend to be more stringent on creditworthiness, but are the best solution in some cases.
Here is a small sample of institutions that offer specialty loans.
- DCU Banking
- J. Best Banc & Co.
- LightStream (Part of SunTrust Bank)
- Star One Credit Union
- Collector Car Lending
- Woodside Credit
If you are a longstanding member of a credit union, you may be able to get them to underwrite the loan for you if your history with them is impeccable.
Insurance may be a factor.
Attaining specialized insurance to meet the lending institutions fancy, you may be able to twist their arm a little, helping you overcome some of their apprehension about a loan for a classic car. Some insurance companies will not touch a classic car for any reason. It’s just a fact of life, just move on to the next one.
Be open to other lenders that may have never been on your radar in the past. Do some research, make some calls, ask questions and write them down on a bank by bank list and build a list of options.
Here are some other issues the banks and other lenders may look at.
- Appraisal of the Classic Car in Question
- Is It a Vintage, Classic or Antique Vehicle
- Is the Paint Original or New
- Is the Paperwork in Order
All of these factors are in play when attempting to get a loan.
Don’t let them start running your credit until you have all of the data you need, then pick the best that fits your needs and abilities. It can be a tedious process, but well worth the effort. Do your homework, protect your credit and make sure you are applying to the correct lending institution for your current situation.
Happy hunting and good luck.
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