Common Types of Classic and Collector Car Financing

Whether you just found the classic car of your dreams or are laying the foundation to purchase the collector car you’ve been eyeing, do not forget to research financing options. With various lending products in the marketplace, take your time to determine what option is best for you.

85% of new cars are financed, and according to Hagerty, 3% of classic cars are financed. It’s commonly thought buyers shouldn’t finance a vehicle they don’t drive every day, but that perspective is changing quickly. Buyers are becoming in tune with vehicle values and the opportunity cost of paying with cash. The whole value proposition for financing a classic is becoming more appealing between vehicle appreciation and performance changes in other investments, like the stock market.

Here’s the list of five different types with pros and cons.

Classic Car Loans

This financing is purpose-built for antique, classic, or collector cars. Lenders who specialize in these types of vehicles have a deep understanding of values and can usually fund quickly and provide terms unmatched by typical lenders. Monthly payments can be surprisingly low with competitive interest rates and generous terms. Loans are secured auto loans and are usually simple interest.

Woodside Credit falls into this category. Woodside is solely focused on classic, collector, and exotic loans. Strength comes from expert knowledge and understanding of the true values of the vehicles, allowing for unmatched loan products.

Personal Loans

For lenders without classic-specific financing, many offer unsecured personal loans in place of classic car loans. Loan amounts vary but are typically capped well below classic-specific financing. This loan type lacks any sort of collateral and tends to exceed the prime rate. This choice has the upside of being convenient, but be cautious of high-interest rates, short terms, and loan risk.

Home Equity Loans

Low (and sometimes variable) interest rates for mortgages and the tax-deductible nature are why some opt for home equity loans. Disclaimer: Consult your tax advisor to confirm before going this route. There are big risks associated with home equity loans, so ensure you do your due diligence when choosing this route.

Local Banks and Credit Unions

Many people have great relationships with their banks and often start there. Local banks tend not to differentiate between a typical used car and a collector car. This can mean shorter loan terms, high-interest rates, and limitations to the age of the vehicle (many will not finance cars over 10 years old). Additionally, the valuation of the vehicle can prove difficult in these situations as classic car values are determined differently than typical used cars.

Leasing

Leasing is attractive for its low monthly payment. As you can see in this comparison though, it does not always achieve that. Some leases are close-ended or open-ended, so ensure the agreement you sign makes sense for the duration of the lease and what you want to do afterward. Additionally, be cautious about balloon payments, which could ultimately lead to a large payment at the end of your agreement.

Ready to learn more about Woodside? Let us help you navigate the classic car world. As the dedicated loan provider for Barrett-Jackson, our classic car knowledge runs deep.

Classic Car FAQs

What is the best type of loan available for classic cars?

A variety of loan types can be investigated to fit your specific financial position. Woodside Credit loans are secured simple-interest loans, meaning the vehicle is used as collateral and the amount going to the principle is based on a standard amortization schedule. No pre-payment penalties, no balloon payments, and no-nonsense.

What is the oldest car a lender will loan on?

Woodside Credit will loan any classic over 25 years old, including pre-war vehicles. There’s no upper age limit to the vehicle Woodside will finance.

What are the different types of classic car loans?

The most common types of classic car loans include secured simple-interest loans and personal loans.

What is the best way to buy a classic?

The Woodside Credit loan program with the lowest monthly payments in America. The unmatched loan program has led the segment for over 20 years.

Why finance your classic car vs. pay cash?

It’s all about opportunity cost. If you can make your cash work harder elsewhere, like investments, financing could be an option for you.