Whether you are a motoring enthusiast, or a diehard revhead, classic cars hold a special place in the hearts of many Australians around the country. Given their status as a collectible, not to mention that they are an investment that appreciate in value as opposed to depreciate, it’s hardly surprising that classic cars are worth a considerable fortune.
At the same time however, this scarcity and prestige often pushes them into a budget that is outside the scope of an individual’s own financial means. And if you want to secure that one and only vintage car, you need to be well prepared and quick to settle. If you find yourself in this position, you’ll be pleased to know that just like a brand new car, or a regular second-hand vehicle, you can obtain finance for a classic car. Here’s what you need to be aware of.
Your credit score is as important as ever
As classic cars often come with a sizeable price tag, it is more likely than not that you will need to take out a larger loan in order to fund the purchase. While any given line of credit will entail a credit check, in this instance you had better have an exemplary record of repayments, not to mention evidence of your ability to repay the loan.
Make sure that before you apply for finance you assess your credit score. If it’s not up to scratch, you may well be knocked back, which will stay on your record for some time. Although it is not a sure thing, it will help your application if you can increase the size of your deposit to alleviate any concerns the lender may have in funding the classic car.
Undertake an appraisal
It’s one thing to be drawn to a classic car for its reputation, beauty or its rarity, however it is still important to ensure that you are paying a fair price for the vehicle and not splurging based on emotion. Apart from your own due diligence, get an expert to conduct an appraisal for you. Often lenders will do this as part of a classic car loan. Given the status of the vehicle as a collectable, a financier will want to see proof of the car’s value before deciding whether to issue a loan. In the event you miss repayments or default on the loan, the lender will want to know they are taking possession of a car that is worth what you are prepared to pay, and will at least retain that value.
Nuances of classic car loans
Beyond the stricter eligibility requirements that accompany a classic car loan, keep in mind that you will also need to have proof of insurance coverage as part of the process. And since classic cars are far dearer to insure than their everyday counterparts, this is an expense you will need to factor into your budget and/or loan repayments. You can reduce insurance premiums via ‘lay up’ periods, which provide theft and accidental damage coverage when the car is stored and not in use. Be wary that while there are no restrictions on the car you can finance, fees and security requirements may differ accordingly.
The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.