Ultimate Guide to Luxury and Exotic Car Loans

Everything you need to know about loans for exotic and luxury cars

Whether you’re a collector or an enthusiast, you won’t need a briefcase full of cash to buy an exotic car. Specialized lenders offer exotic car loans which can make your dream a reality. But how can you choose the right exotic car lender for you? And are standard auto loans ever a better option? Let’s discuss.

What are exotic car loans?

Exotic car loans differ from conventional auto loans in that they typically offer longer repayment terms. Conventional auto lenders typically offer up to 84 months, and some credit unions offer repayment terms as long as 96 months. By contrast, some exotic car lenders offer up to 144 months to pay off your exotic car. That’s a whopping 12 years!

Because exotic car loans are so large and feature such long repayment periods, exotic car lenders must carry a lot of risk over an extended period. As such, if you have poor or fair credit, it will be harder to qualify for such a loan. And remember, lenders compensate for longer (riskier) repayment periods with higher interest rates — even if you have stellar credit.

Benefits of exotic car loans

Working with a lender that offers exotic car loans offers several benefits.

First, specialized lenders understand the market, more so than a conventional auto lender. They may offer you advice or support in the buying process, which can be especially helpful if it’s your first exotic car.

Taking on an exotic car loan also frees up your money for other financial goals. Even if you have the savings to purchase your exotic car upfront and in cash, the purchase will drastically shrink your nest egg. If you were take out a loan instead, you could invest that extra money and see significantly higher returns.

And at the end of the day, many traditional auto lenders refuse to finance exotic vehicles. It would be difficult to pay off your exotic car with the shorter loan terms and lower loan offerings offered by conventional lenders. If you need a loan to finance your purchase, seeking out a specialized exotic car lender may well be your only option.

Drawbacks of exotic car loans

Although exotic car loans have their benefits, they’re not always the best option.

Some specialized lenders have restrictions on which cars they’ll finance, especially if your exotic car is a high-production model. If your car is not among their included models, it may be impossible to secure a loan.

Also, exotic cars fluctuate in value throughout their lives. If your model depreciates quickly enough, you could find yourself underwater on your loan. That means that by the time you’d finished paying for your car, it could be worth half what you paid for it. This is especially harmful if you were hoping to sell your exotic car for profit.

Lastly, working with a specialized lender to get an exotic car loan can mean higher interest rates. There aren’t a lot of lenders that offer exotic car loans, so it’s harder to shop around. Combine that with the fact that exotic car loans are harder to qualify for, and you’re left with very few offers to compare.

Seeking out conventional auto lenders that offer long repayment plans could open up more options for you.

“I wish I had looked around a little more when I got my loan,” says Bill Shepard, a New York-based car enthusiast. “I figured at the time that my options were limited, so I didn’t bother to check.”

Where can find exotic car loans?

If you’re interested in getting an exotic car loan, here are two lenders to consider:

LightStream

LightStream is the online consumer loan division of the Sun Trust Bank. With LightStream you can purchase any collector car from any seller — there are no limits on the make, model, year, mileage or loan-to-value. Apply online to find out what rates you qualify for. If approved, you can have the money in your account in as little as one day.

Woodside Credit

Founded in 2003, Woodside Credit offers specialized loans for exotic cars, classic cars, collector cars, and antiques. The lender requires a high credit score, so if you have poor or fair credit, you should work to improve it before applying. You can get a quote for Woodside credit rates through their website. You can apply for a loan online, or by calling 1-800-717-5180.

J.J. Best Banc & Co.

Founded 1993, J.J. Best Banc & Co. finances a large range of collector cars, including antiques, hot rods, exotic cars, sports cars, and muscle cars. It also finances boats and aircrafts.

J.J. Best Banc & Co. allows you to pre-qualify for your loan before formally applying. Pre-qualification doesn’t require a hard credit check, so it won’t hurt your credit score. If you’re interested in applying, you can do so online or by calling 1-800-872-1965.

Should you get an exotic car loan?

Before choosing a specialized lender, do your due diligence to make sure you get the best terms available.

To find out what conventional auto lenders have to offer, check out SuperMoney’s auto loan engine to get pre-qualified with several lenders at once. You’ll receive several offers from lenders based on your creditworthiness.

If you shop around and compare loan offerings to find the best deal, you’ll be in a better position to save money over a long repayment period.

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