If you are a devotee of custom or classic cars, you may want to think about how to go about financing one. Not everybody who collects classic cars has the cash to pay for it in one fell swoop. Though significantly different from conventional auto financing, this specialty is still something to consider if that perfect car has caught your eye. Just try to get a handle on the process and then make your vintage car dreams come true.


Classic Car Financing


As almost all of the regular sources of auto loans stay away from loans for classic vehicles, a car lender that handles specialty cars will be likely your only option. Unlike other lenders, specialty car lenders don't use any of the traditional price guides to assess the value of the car in question. They will make their own evaluation as to the cars value.

A good practice to get into is to get a credit report prior to any vehicle shopping. The lender is sure run a credit check, so you should be aware of any problems so that you will have time to address any issues that may be fixable. Remember, all negative activity in your credit history can affect your score and ultimately your ability to secure financing. Foreclosures, bankruptcies and an excessive amount of late payments can significantly damage you scores and hurt your chances of procuring a loan. Furthermore, classic car lenders usually have more rigorous lending rules than do traditional auto lenders.

You will also find that custom car loan terms can differ from those of the common everyday auto lender. It is not unheard of to have a 10-year loan, for example, on a classic auto. New car lenders typically offer loans for a maximum of 6 years.

Classic car financing differs in the amount of down payment required as well. With a new car it is fairly easy to procure a loan that finances the full value of the vehicle - that is, no down payment. Classic car lenders, in most cases, require at least 20 percent of the value as an initial payment. Because of the more subjective manner of estimating the value of a vintage automobile, the larger down payment offers a heftier collateral, in a sense, in the event of loan default.

Classic car lenders almost invariably require some kind of physical inspection of the vehicle before approval of financing. Approval for financing of a new or used car, on the other hand, can be arranged without even viewing the car. Basic information about the car is all that is needed.


Classic Car Financing


There are definitely some challenges that are unique to the buyer trying to arrange financing for a classic car. As is often is the case, title questions can arise with classic vehicles. Make sure that a title does exist before you expend time and energy trying to get a loan. Without a title you are out of luck.

Before you take the steps to financing a classic car, you need to decide if it really makes sense in the long run. Is it for fun or is it an investment or both? Many of the classic vehicles continue to increase in value. Do your research and then determine if borrowing for a classic car is for you.


Classic Car Financing