Home > Car Loans > Can I Get a Car Loan for Classic Cars

Can I Get a Car Loan for Classic Cars

Jacaranda Team

Jacaranda Team

January 8, 20215 minute read
The Jacaranda team works hard to ensure the quality and accuracy of our articles.

Quality Checked

Cars generally depreciate in value over time. But they’re some special breed of cars that don’t. Classic cars are considered as an investment, as they have the potential to increase in value over years. The demand is also much higher than the supply as they’re a lot of classic and exotic cars collectors out there. This also makes them very expensive to purchase outrightly and you might be considering taking out a loan to finance your dream classic car. However, it is important to note that some banks and lenders do not offer loans for classic cars because they place an age restriction on cars they finance. Financing a classic car is a little different from traditional auto loans so you need to broaden your search and load yourself with knowledge of how classic car loans work.

On this page:

    How do classic car loans differ from traditional auto loans?

    Classic cars are much older cars and are not the average cars you see been driven every day on the road. This type of car is also rarely purchased by the average person and are mostly paid for in full when they are. This however doesn’t mean that finance options are not available for them since a number of classic car buyers also take out a loan for financing. Standard car financing has requirements that are slightly different from that of classic cars. You’ll need higher rankings on your credit and income to qualify for a classic car loan as these loans are generally more expensive. Classic car loans have stricter requirements but are not impossible to get.

    How to get a classic car loan?

    Consider a specialized lender

    There are lenders who specialize in classic car loans and do not have an age cap on vehicles. These lenders can operate similarly to standard car loans, being that your car is put out as security for the loan. A secured car loan will also mean you stand a risk of repossession if you default with monthly repayments. This is to guard the lender from risk and you’ll probably get lower interest rates. However, classic car loans are still more expensive than standard car loans and will have higher interest rates compared to traditional auto loans.

    The lender will value the car considering factors like the condition, originality, rarity and collector appeal of the vehicle.  This will determine how much you’ll be borrowed to finance the car. Classic car loans are usually flexible with the amount you can borrow.

    Consider taking out a personal loan

    A personal loan is taking out to finance personal needs and is not restricted to a car. Personal loans are mostly unsecured type of loans and offer more flexibility. Because they’re unsecure you do not stand a risk of repossession, but you’ll most likely pay higher interest rates. You can also decide to secure the loan with collateral and get lower interest rates. Personal loan rates can either be fixed or variable to offer you an option that fits well with your budget. You can borrow up to $100,000 with a personal loan, and it’s generally a more flexible option for financing a classic car.

    Check your credit

    Lenders will check your credit to decide if you’re a good fit for the loan. Your credit history shows your record with other credit payments. You’ll have a good credit score if you’ve been making prompt bill payments and due monthly loan repayments on your previous loans. Your credit history is a test of your trustworthiness. Lenders will use this to evaluate you as a high or low-risk borrower. A good credit score also gives you leverage to negotiate better rates.

    Credit requirements are usually stricter with classic car loans and you’ll need to have a really good credit score to qualify. A bad credit score means that you’ve been defaulting with other loans and probably accumulating debts. Lenders can’t trust you and you will have to pay higher interest rates if you qualify at all. You can take time to build your credit score before applying for a classic car loan to be sure that you’ll qualify. Also, request for a free copy of your credit report from any of the credit bureaus to review and check for errors before meeting with your lender.

    Have a substantial income

    Another important factor lenders consider is stability and consistency in your income. You need to offer proof of a stable income that is able to finance your monthly loan repayments. Classic cars are usually more expensive and you’ll need to have a much higher income to qualify for a classic car loan. Having multiple income sources other assets and properties will also boost your chances of qualifying for a classic car loan. Lenders also review your bank statement to be sure you do not spend above your means. They’ll check for a balance between your income and expenditure to be sure you have good financial standing.

    Save up for a down payment

    Most lenders will require you to pay an initial deposit on the car. The more you have saved up for down payment, the less you’ll have to pay monthly. A substantial down payment also proves to the lender that you’re able to finance the car long term. It is advisable to save up to 20% of the purchase price or more as a down payment. Having a good enough down payment will also mean a shorter loan term with less to pay as interest. Make sure you factor in additional fees and taxes when saving up for an initial deposit, as you may also have to pay this in cash.

    Consider a car loan broker

    Getting a classic car loan will involve researching specialized lenders and comparing for the best rates. A car broker can help you with the difficult part of this since they have a relationship with a panel of lenders. They’re professionals that act as middlemen between you and the broker. They’ll help you compare and negotiate the best rates with a range of lenders to provide you with the best option that suits your need.


    Copyright © www.jacarandafinance.com.au Jacaranda Finance Pty Ltd ® ABN 53 162 078 195 Australian Credit Licence 456 404, Pawnbroking License Number 4221738. The information on this web-page is general information and does not take into account your objectives, financial situation or needs. Information provided on this website is general in nature and does not constitute financial advice.


    Jacaranda Team
    Jacaranda Team

    Written by Jacaranda Team

    Reviews don’t lie 🌟

    Reviews current as of June, 2021.

    Our low rates

    Our low rates

    💰 Personal Loans starting from 8.69% (12.05% p.a. Comparison Rate)

    🚗 Car Loans starting from 5.29% (5.84% p.a. Comparison Rate).

    We never charge early repayment or exit fees.

    Apply Now 🚀
    Existing client?

    Existing client?

    Manage your loan easily in one place.

    Log In
    Had a good experience?

    Had a good experience?

    Share the love by referring a friend now and receive up to $100 of free credit 💸

    Refer a friend

    Need a hand? 👋

    Jacaranda is 100% online. So, we do not accept applications over-the-phone. However, our friendly team is more than happy to answer any questions you may have.