If you’ve got your eye on a vintage or classic vehicle, you may be wondering what kind of financing options might be available to you.
Shopping for a vintage car generally isn’t as simple as browsing car dealerships for a suitable make and model. It can be seemingly impossible for a car enthusiast to predict when their dream vehicle will hit the market.
When the opportunity does come about, some buyers may not have all the cash in the bank to make the purchase outright.
While it may seem like the obvious solution is to simply apply for a car loan, it’s important to note that a vintage car may not meet the requirements for most standard car loans.
For starters, many lenders won’t approve a car loan for a vehicle that’s more than five years old. In some cases, a car loan may be available for vehicles up to 10 years old, but that still isn’t much help if your dream car is from the 1960s.
So, while it is possible to get a car loan to buy a vintage car, in many cases you may need to weigh up other options.
What kind of finance can I use to buy a vintage car?
With limitations on the kind of car you can buy with a standard car loan, there are a couple of alternatives you might like to consider.
Specialist car loan
There are a number of Australian specialist lenders that offer car loans specifically for vintage or classic cars.
These specialised car loans are similar to standard car loans in that they can be used exclusively to purchase a vehicle, generally offer loan terms of up to five years, and have a similar repayment structure.
You’ll likely also have the option to secure the loan on the car in order to potentially access a lower interest rate.
However, this is often where it differs.
Since vintage and classic cars typically don’t have the same depreciation schedule as a modern car, the lender will likely need to have the car valued before approving the loan.
A personal loan is a less specific type of finance with borrowing limits of up to $50,000, and in some cases up to $100,000.
It’s possible to finance your vintage car with a personal loan, but whether a particular lender will consider the loan generally depends on their individual loan purpose restrictions, plus the specifics and condition of the car.
Reach out to your preferred lender or read the product’s disclosure statement to find out whether the car you want to buy meets the requirements.
If you’d prefer a secured loan over an unsecured loan, there can be more flexibility with a personal loan as you could potentially secure it on another asset such as your home.
Consider your credit score
Lenders will typically consider financing a vintage car to be a greater risk than a standard car loan for a modern vehicle.
For this reason, it may be essential for you to have a good credit score in order to get approved for a specialist vintage car loan.
In addition to this, a good credit score can also help you secure a more competitive interest rate, regardless of the finance option you choose.
Consider using a car loan broker
A car loan broker is similar to a mortgage broker in that they can help you find a vintage car financing option that’s right for you.
While there’s no guarantee that a broker will secure you the best car loan, they can help you with your comparison and take care of some of the more difficult aspects of the loan application process for you, including negotiating with lenders.