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If you’re like most classic car aficionados, there’s nothing you love more then driving down a country road in your dream car with the windows down and the breeze blowing by. Whether you’re considering buying your first classic car or you already have a garage full of collector cars, one question you might be struggling with is how you’re going to finance your next purchase. According to Hagerty Group, there are around 5 million collector cars in the U.S. Of these, 58% are owned by baby boomers and the median age of car owners is around 56.
Part of the reason why classic car collectors are mostly over 50 is that, until recently, there were no classic car loans. The only way to purchase a collector car was to buy it with cash or to get a home equity loan or personal loan in order to finance the purchase. For that reason, it has been difficult for many younger classic car aficionados to buy their dream cars.
Traditional auto lenders didn’t understand the classic car market, so they were wary about lending to buyers. Traditional auto loans generally operate on the assumption that cars depreciate as time passes and that means that the older a car is, the less likely a lender would be willing to consider classic car financing. In traditional auto loans, the car is used as security or collateral for the loan and so there was too much perceived risk and complexity for lenders.
Best Classic Car Loans Currently Available
3.34% – 9.19%
$5,000 – $100,000
24 – 72 months*
6.25% – 17.95%
12 – 144 months
$6,000 – $750,000
60 – 84 months
In the last several years, a number of new lenders with an understanding of classic car financing have started offering loans aimed at classic car fans. These classic car loans come with a lot of options. For example, you can get a secured or unsecured loan depending on the lender that you choose and your particular credit and financial history. While most collector car loans require the owner have a good to excellent credit rating, there are also lenders who cater to those with lower credit scores.
Most lenders require buyers to pay a certain amount of the price of the car as a down payment – this can be anywhere from 10% to 30%. The length of the loan varies depending on the lender and so does the interest rate ranges. Some lenders will also offer place restrictions on the type of car or the model that you can buy with their classic car loans.
Here are some popular classic car lenders:
3 of the Best Classic Car Lenders
LightStream is a popular online lender who offers both traditional auto loans, as well as collector car loans. They offer extremely low rates and you can borrow between $5,000 and $100,000. They offer fixed rate loans that start at just 3.99%. There are no restrictions on the type of vehicle that you can buy.
LightStream offers both secured and unsecured auto loans with no prepayment penalties for terms between 24 and 84 months. The online application for LightStream collector car loans takes only a couple minutes. If you send in your application during business hours, you will hear back from them within minutes and you can often get the money the same day.
Collector Car Lending
Collector Car Lending is another well-known player in the collector car financing market. In addition to offering loans to those with good and excellent credit, they also offer classic car financing to those who have less than perfect credit. They are one of the only classic car lenders who will consider lending to those with credit scores as low as 600.
Their minimum loan amount starts at $10,000, and they specify the type of cars that you can buy with it. You can purchase exotic cars that were manufactured in 2009 or before or classic cars manufactured between 1928 and 1996. Their rates start at 6.25% and their terms go up to 144 months with no prepayment penalties. If you have less than ideal credit, your rates will be between 10.5% to 17.95% and they require that you put 20% to 30% cash down.
They offer a quick online application and usually get back to applicants in 15 to 20 minutes during normal business hours.
J.J. Best Banc & Co
One of the most popular lenders in the collector car lending market is J.J Best Banc & Co. They allow you to borrow anywhere from $6,000–$750,000 and have competitive auto loan rates with multiple term length options with no prepayment penalties. They provide quick responses to loan applications during business hours and you can potentially get the funds deposited into your account the next day.
They offer fixed rate loans that start as low as 2.19%, but what you will pay will depend on your personal credit profile. Also, they offer both secured and unsecured loans depending on your credit profile and require that you put up to a 30% down payment on your vehicle.
*Payment example: Monthly payments for a $10,000 loan at 9.34% APR with a term of 3 years would result in 36 monthly payments of $319.58. LightStream disclosures here.