Collector Car Financing - Why Most Lenders Won't Provide an Antique Car Loan

Most conventional lenders are reluctant to make an antique car loan, even though buying an antique or collector car is a smarter financial decision than buying a new car. The biggest reason many lenders do not offer collector car financing is that a collector car is very difficult to place an accurate and reliable value on. With a new car or one that is less than 20 years old, it is much easier to nail down an accurate market value. With an antique or collector car, there are way too many variables for many lenders to deal with.

For instance, is the car all original or has it been restored? If it has been restored, what is the quality of the restoration like? Is it unique or rare in any way? Is it a popular car with a wide fan base such as a first generation Camaro, early Mustang, or Mopar E-Body, or is it a more obscure (but rare) model that would only be worth a considerable amount of money to a relatively small group of collectors? Has it been modified, and if so, how do the modifications affect the value of the car? Is it really a Chevelle Super Sport, or a mundane Malibu that someone has swapped engines in and added emblems to? Did the car once belong to a celebrity, or is it a vintage race car that won some famous races? These kinds of questions will make a normal loan officer's head spin, but all of these factors will come into play when you are applying for classic auto financing.

The bottom line for the classic car finance provider is, "If the borrower defaults on the loan, how easy will it be for us to sell the vehicle and get our money back for it?" With a new (or late model used) car, there are enough "data points' for a lender to get a relatively accurate and reliable picture of what they are up against if the borrower defaults on the loan. With a 1957 Desoto Adventurer coupe, there aren't a lot of data points to compare to. Even for a more common classic car, such as the ubiquitous 1969 Camaro, the values vary so greatly due to the options, condition, and modifications that a typical lender just isn't well-enough informed to make a good decision. So they bump up the interest rates to cover their losses in case they overestimate the value of the car, or they just don't offer collector car financing at all.

When looking for collector car financing or classic auto financing, it is best to seek out lenders that specialize in classic car finance, or at least have an antique car loan program. These lenders will most likely be able to give you a better interest rate and/or a longer loan term than you will get with lenders who concentrate on newer car loans. These lenders are familiar with the classic car market, and will understand why a 50 year old car could be worth $50,000 or even much more.