Have you had apprehension about financing a car in a private sale? Well, you wouldn’t be the first. The lending environment does not always make it as convenient as going to a dealership, especially for classic and exotic vehicles. While unsecured loans are more common in private party sales mostly due to convenience, higher interest rates push many savvy borrowers to look elsewhere.
With a more competitive used auto market than ever before, up 35% more competitive over the same 9 month period last year, it can feel like a sellers’ market. Whether you are looking for that classic Porsche 911, a desirable vintage Bronco, or a red Ferrari, use the below tips for financing a classic car in a private party sale to help navigate the purchase process in the ever-more competitive buying environments.
Find Out if You’re Eligible. Get Pre-Approved.
If you’re like most classic car buyers, it may take months or even years of research to find the perfect vehicle. By taking the first step of determining how much to spend and if credit is available, you’ll know what makes sense to stay financially savvy (it may also help narrow the search). When you do find a vehicle that feels like the right one, it may make sense to get pre-approved. A pre-approval letter may differ from lender to lender but can typically last for at least 30 days. The pre-approval allows you to go to a seller with an offer and confidently show that a lender is willing to extend credit for the deal, allowing you to strike while the iron is hot. Pre-approvals for vehicles are common in the auction space and are becoming more common for private party sales.
Be timely with Loan Documents
Loan documents may be the most overlooked item during the excitement of a purchase. Loans can generally take longer than buying with cash simply because of signatures and documents. Plan for your loan documents and plan for the time it takes to review the documents. The sooner you can review, process, and execute loan documents, the sooner the loan and funding process can be completed. Lenders like Woodside Credit work directly with buyers and sellers to get the documentation that is needed, collect e-signatures and streamline the loan process so that you can get your loan funded quickly.
Find a Lender with Private Party Expertise
While most lenders are okay doing a private party sale, they may lack the expertise to keep all the pieces running efficiently. From working with all parties to having expert knowledge of the type of classic car you are buying, using a lender with private party expertise will help you execute a purchase in a timely manner. Additionally, look for tech options from your lender, like e-sign and virtual inspections. Technology can make a considerable difference in the purchase process and even allow funding to take place on the same-day.
Classic cars continue to rise in value and interest among classic car buyers is at an all-time high. With these three tips, you’ll have some additional expertise to help you find the classic car of your dreams. Ready to find your dream car? Get pre-approved today.