When it comes down to talk about classic car loans, we have to figure out how to get financing and how to secure it. If you are thinking of getting yourself a classic car as a way of investing money or simply a means of transportation, you might consider financing your purchase. Despite the fact that by financing a classic car it will increase the overall cost significantly, only so you do not have to wait for a couple of years in order to afford it. Plus, in some cases, waiting for a couple of years will not be enough because as classic cars get older, their value increases, depending on the model.
If you have decided to purchase a classic car, you must first determine how much money you are willing to pay for it in the future, before starting to search for financing methods, either as a monthly payment or as a lump sum. It is up to you to decide if you are going to get a loan or wait a certain amount of time until you can afford the car on your own. Take into consideration the fact that high monthly payments will induce stress and there is the possibility that you will not fully enjoy the satisfaction of owning a classic car, due to your financial issues. There are many cases with people that bought a car through a loan and had to get second jobs and they didn’t have time to enjoy their new acquisition.
Remember to check your credit rating and make sure that it is in a decent shape. If your credit is above 700, there shouldn’t be any problems in getting a classic car loan. Anything below the 600 mark makes it almost impossible to obtain financing. You will be most likely disqualified if you have any pending lawsuits or recent bankruptcies.
You can get pre-qualified for a loan even if you do not know at the moment the exact car and model you want to buy. A specialty classic car lender can help you find exactly what you need, wheatear it is a 60s convertible, a 50s American hotrod or any other car that you desire. In most cases, the person that wants to get a loan has about 30 to 60 days to find his car; that should be enough time to find the right one.
In most cases (and it is highly recommended), you should have some money saved prior to qualifying for a classic car loan. The vast majority of these specialty car lenders will ask you for a 20% down payment on a classic car or even 30% if you want a hotrod. Depending on your current credit score, the necessary amount of money for the down payment can go up or down.
Do not forget about the travel and shipping expenses as most likely you will want to inspect the car first before buying it so if the car is not in your area, you must take into consideration the travel costs. For this reason, it is recommended to find a seller that lives close to you so that you will not have to pay an additional fee for transporting the car. Of course, if you want your dream car, anything goes.
It is advisable to browse the Internet in order to find several lenders that are capable of providing financing for classic automobiles as well as other specialty vehicles. You must determine which car do you want and find out the likely price at which you will be capable of negotiating a deal. Now you must apply online to one of these listed lending institutions in order to obtain a classic automobile car loan. It is advisable to use more than one institution in order to increase your chances of getting the required financing. The level of financing you will be eligible for is calculated on the lender’s determination of the current fair market value of your desired car.
The advantages of using the services of a specialty car lender are considerable as these institutions know more about classic cars in comparison to a general lender institution. A standard auto lender uses the NADA or the Kelley Blue Book price guides, but such guides are not applicable on older collectibles, especially for hot rods, restored automobiles and other similar cars. Another advantage of using a specialty car lender is that they are able to speed up the entire process and offer you a lower interest rate as they are fully capable of comprehending the true value of your desired purchase. If you are considering a longer loan term you should know that the typical automobile loans are from three to five years, in comparison to specialty car loans that can expand over 10 years. Of course, the longer the loan, the higher the interest rates, but you have the option of choosing exactly what you need or what you can offer.
There are a couple of alternatives about classic car loans that you might want to take into consideration, like borrowing against your home equity or some sort of a retirement plan like a life insurance policy. These loans can come with more relaxing interest rates for the consumer in comparison to the ones offered by the lenders that specialize in financing classic cars.
Regardless of the method you choose, make sure that you do not overdo it. The vast majority of the financial institutions that give loans advise their customers to get long-term financing only for housing or transportation and they tell customers to avoid debt for luxury purchases. It is advisable to be very attentive when submitting loan applications to various websites. Although it may seem that by doing so it will increase your chances of getting the loan, there is the slight possibility that your credit rating will decrease.
All things considered, there are a lot of ways of financing a classic car loan, all with their advantages and disadvantages.
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