Tips for Financing Collector Vehicles
by Sean Cundall
 

There are many reasons to purchase a collector car: you might have dreamed about owning a specific model, you might want to restore a classic that's not in great shape, but has potential, or you might just want something really special to drive on weekend excursions. Whatever the reason, there are classic and collector cars, including vintage muscle cars, waiting to be purchased and appreciated – as long as you have the cash.

The good news is that if you have decent credit scores (generally 650 or higher) you can finance a collector car, much as you would a brand new Honda Accord or Toyota Tacoma. To do this, you can either choose a general loan source, such as your credit union, or you can talk to a company that specializes in classic and collectible cars and trucks. The former may give you a better rate, but the latter may be more willing to give you a higher loan amount.

In order to determine which type of lender to use, and then to find the best rate and program, here are some points to consider:

• Does the company finance older vehicles? If you're not using a classic/collector specialist, this is an important bit of information.

• Are there any application fees? How about appraisals of the vehicle?  Fees may make a rate that seems great decidedly less so.

• What's the maximum loan amount? If you're buying a vehicle that has already been restored, or is an elite vehicle, will the lender be able to finance it?

• Once you've been given a quote, how long is it good for? Do you have time to shop, or should you already have your dream car identified? For that matter, is there time to get other quotes for comparison?

• What are the loan parameters? Is it a three or five-year term, or some other length? How is the interest calculated, and is the rate fixed or variable? Is there a prepayment penalty? What are the late fees like?

• Is an automatic payment plan available?

Less-than-perfect Credit

While financing new cars is possible with credit that is "dented," financing a classic or collector car is a bit trickier. Most specialty lenders require good-to-excellent credit, so if your scores are below 650, you may want to look at your credit union, or talk to standard lenders (banks, auto lenders) instead.

Whatever your credit scores are, and whichever finance path you choose to take, always research a potential lender to make sure they are stable and reliable before providing them with your personal information.