classic car loan guide

Classic Car Loan: 4 Steps to Auto Financing You Should Know About

The more time you spend saving up for the classic car of your dreams, the higher the price of the car goes. Whether you want to lock in a lower price – and more appreciation – or you come across a classic car you just can’t pass up, financing may be in your best interest. Follow these simple steps to your next classic car loan.

1. Decide the type of loan you want

There’s no best way to finance a classic car. Depending on your needs and preferences, there are plenty of options from which to choose.

Classic car loan

If you want to work with someone who knows what it’s like to buy a classic car, you may want to work with a lender who specializes in the market, such as Lightstream. Your loan officer will understand the market and can offer competitive terms tailored to your classic car.

“Once approved the loan process works in a very similar to a normal car loan,” says Tom Joslin, director of marketing at J.J. Best Banc & Co., a classic car financier. “Our approval process can usually be completed in five minutes or less, paperwork is easy to complete and overall the process is very quick and easy from approval to funding.”

Personal loan

If you have cash on hand and don’t want to go through the lengthy process of securing an auto loan, a personal loan may be right up your alley. Joslin points out, however, that your interest rate will typically be higher than that of a classic car loan. Personal loan lenders may also limit you in how much you can borrow.

Applying for a personal loan is best if you’re just a little short of the purchase price and you plan to pay it off quickly.

Home equity loan

If you have equity in your house, you may be able to get a low-interest home equity loan to finance your classic car. What’s more, the interest you pay on such a loan is tax-deductible, which could save you even more money.

The biggest drawback to using a home equity loan for your classic car you could lose your house if you default on the loan.

Conventional auto loan

A regular lender may approve a loan for your classic car, but the terms may not be in your favor. Because they’re not geared toward classic cars, a conventional auto loan for an older car may have a short repayment period and a higher interest rate.

You may also get denied outright because the bank doesn’t finance cars past a certain age. Also, the loan officer may not understand the classic car market.

2. Make sure your credit is in order

As with any loan, the lender will want to make sure you’re not a borrowing risk. If you have good or excellent credit, you’ll have a better chance at getting approved, and at a more favorable interest rate. “Classic car financing requires better credit and some experience with previous car loans,” says Joslin.

So, if your credit score is in the poor or average range, you may want to work on improving your score before applying for a classic car loan.

For starters, check your credit score using a free credit reporting service like Credit Karma or Credit Sesame.  If you find that your score needs some work, find out what’s holding it back and determine ways to build your score.

For example, pay down credit card balances, make on-time payments, and correct errors on your credit report.

3. Calculate the costs of a classic car loan

Owning a classic car costs more than just the price tag of the vehicle. Insurance, maintenance, and restoration costs can add up if you’re not careful. Classic car loans also typically require a larger down payment, ranging from 10 to 20 percent.

If this isn’t your first rodeo, you’re likely aware of the costs associated with owning a classic car. But different makes and models may have different costs that you should be aware of. Do some research beforehand to make sure you can afford the ongoing costs you’ll be facing.


Once you’ve carefully compared your loan options, put your credit in order, and calculated the costs, it’s time to apply for a loan. If you’re applying with a lender who specifically offers classic car loans, you may be able to score a longer repayment term, up to 10 years. This can be helpful if the sale price for the car is high.

Avoid choosing a long repayment period if you can afford a shorter one. Shorter repayment periods often come with lower interest rates, and you’ll also pay less interest over the life of the loan. Use SuperMoney’s loan offer engine to check what rates you qualify for and how monthly payments vary by the length of your term.

Next steps

If you already have your eye on a classic car loan, start by comparing rates and terms of leading auto loan providers. Once you’ve found one you like, look to see if you can get pre-approved for an offer. This process doesn’t affect your credit score and can give you a good idea of what your options are.

Once you’ve found a lender, reach out to see if they offer classic car loans. If they don’t, move on to the next best offer. If they do, start on the other steps to make sure you’re in good shape financially.

As you take these steps, you’ll be on your way to getting the car of your dreams. What’s more, you’ll be able to take that path with peace of mind knowing that you’ve done it the right way.