Car loans for classic cars

Getting a loan for a classic car can help out if you don't have the full amount of funding available, but are otherwise ready to make a purchase. When taken care of, a classic car can be a practical and enjoyable investment. However, with a lot of collectors and enthusiasts out there, it can be a competitive market. Not having enough cash upfront means you might miss out on a gem without finance.

Considering your finances and comparing your options is an important step towards finding a classic car loan with a repayment plan that works for you. Find out how to do so in this guide.

What to know about classic car loans

Classic car loans share a lot of features with standard car loans, but can also have some defining characteristics that set them apart.

• Stricter credit requirements: Many classic car loan providers will only accept customers with a good credit score. Good credit borrowers help lenders reduce their risk level. This, in turn, means that they can offer lower rates to customers.
• No age restrictions for vehicles: Typical car loans will often have age restrictions on the vehicles you can buy. These can range anywhere from 2 - 10 years. As classic cars are far older but are high-value purchases, the age restriction is more lax.
• Different types of restrictions on vehicles: Classic car loans can often be used to buy unique, muscle or other rare vehicles while everyday car loans might not let you.
• Expert valuations: Sometimes there may not be established guidelines for valuing a specific classic car. Classic car loan providers will often have experts who can establish the car's value.
• Loan options to match your credit: The options you qualify for - loan amount, repayment term, interest rate and whether or not the loan requires asset security will often be dependent on your credit. For example, if you're looking for a bad credit muscle car loan you might only be able to get a secured loan.

Loans that can be used to buy classic cars

• Pepper Money Unsecured Personal Loan: comparison rate. An unsecured personal loan that could be used for a classic car.
• SocietyOne Unsecured Personal Loan: comparison rate. A SocietyOne personal loan offers lower rates for good credit borrowers.
• Latitude Personal Loans: comparison rate. Borrow up to with the Latitude Finance Services personal loan.

Finder survey: How do Australians of different ages finance a new car?

What to look for in a classic car loan

When considering getting a classic car loan, you should also look at:

• Fees: Does the lender charge any fees? Consider the impact these might make on your total payments.
• Repayment period: What is the duration of the loan period? Does it work for you?
• Flexibility: Can you make additional repayments? Are there any early repayment fees? Can you redraw early repayments? The flexibility of a loan can affect how suitable it is for you.
• Security: Does the lender require collateral? With bad credit, you might only qualify for a secured classic car loan. But, with a stronger credit score, you could qualify for an unsecured loan.

Remember that he total amount you'll be repaying and your overall value for money is often dependent on more than just the interest rate. Always consider all factors of a loan before applying.

What to consider

It can also be a good idea to consider any insurance requirements that might come with your car loan. Many car loans will, as a condition of your borrowing, require you to take out comprehensive cover. Check with the lender prior to borrowing what type of cover they might require. While it’s generally a good idea to take out cover to protect your vehicle, there might be conditions around the type of cover required which make it less suitable for you.

Specialised classic car insurance policies can include benefits such as lay up periods to reduce premiums. These may be more suitable if you’re a collector or looking to invest in the classic car as an appreciating asset.

What are my other loan options?

While some lenders will have a specific product called classic car financing, these aren’t your only options. If you aren’t eligible for a classic car loan or the terms aren’t right for you, you can consider:

• A personal loan

  Personal loans can usually be spent on almost anything. There are unsecured or secured options. An unsecured personal loan might carry a higher interest rate than another alternative, but may also deliver wide-ranging benefits. Secured personal loans usually have lower rates, but you'll have to check as to what qualifies as security on the loan. Some secured loans may also have restrictions on what you can spend your funds on.

• A standard car loan

  An everyday car loan may be preferable if your chosen muscle or classic car is in line with the lender’s requirements. In many cases, the same providers will have options for financing everyday vehicles and classic and prestige vehicles. Therefore, it may be worth seeing if you can get classic car financing from an everyday car loan provider.

• A finance broker

  The loan terms and conditions can make a significant difference to your costs in the long run, especially when you opt for a long-term loan. For this reason, it may be worth consulting a finance broker. They can consider specialised classic car loans alongside other options and help you find the one that’s right for you.

• Dealer finance

  Many car dealers may be willing to offer you financing. While this can be a convenient option, it’s still worth comparing their products alongside financing from other providers to make sure you’re making a smart investment. Car dealership finance can be more expensive than online loan providers. So, it's best to do your research.

Before you take out any type of finance for a classic car, remember to review all of the costs and features to make sure it suits your needs and budget. To apply for any of the finance options on this page, simply click "Go to site" to submit an application.

Picture: Shutterstock

Written by

Elizabeth Barry

Lead Editor

Elizabeth Barry was the lead editor for Finder. She has over 10 years' experience writing about a range of topics with a focus on personal finance. You’ll find her writing and commentary in a range of publications and media including Seven News, the ABC, MSN, the Irish Times and Singapore Business Review. See full bio

Elizabeth's expertise

Elizabeth has written 239 Finder guides across topics including:

• Banking
• Personal finance
• Investing