Most lenders are really reluctant to make a classic auto loan, although buying a collector car is often a wise investment. The main reason that more lenders don’t offer collector car loans is that these cars are very difficult to place an accurate value on. With a car that’s less than twenty years old, it’s easier to assign a dollar value, but with an antique, there are far too many variables to do this.
For example- is the car completely original, or has it been fully restored. If it’s been restored, how well has the work been done? Is it a rare model, or is there something that sets it apart from other cars? If it’s a popular vehicle, such as a Mustang or an early Camaro, it will probably be easier to get an auto loan for it. However, if it’s more of a niche vehicle, or if it’s been heavily modified, or if it once belonged to someone famous, it can be much more difficult to secure financing.
For auto loan providers, their first thought is “If the borrower fails to pay the loan, how much money will we be able to recoup if we sell the vehicle?” With a newer car, it’s easier to get a fair price, but with a classic model, options and other variables can make this process more difficult. Because of this, lenders often raise interest rates on classic best auto loans to cover any potential losses.
Wed, Nov 18, 2009
Loans