Collector cars can be good investments if you choose wisely. If restoring or driving collector cars is your hobby, you can get a return on your investment and enjoy yourself doing it! There aren’t very many other “toys” out there that can earn their keep; most hobbies require you to invest in depreciating assets (Jet skis? Pleasure boats? ATVs or other off-road vehicles? Hunting, fishing…you get the picture). Collector cars in general will hold their value at the very least, and in most cases will appreciate as time goes by, instead of depreciating in value or getting “used up”.
If you are thinking about purchasing a collector car, using cash is the safest way to do it. However, an argument can be made for collector car financing when you look at the “opportunity cost” of having all that cash tied up and unavailable for other investments. You may be able to get an antique car loan and pay less interest than your money could be earning elsewhere. Most likely though, you would need to get that financing from a company that specializes in antique car loans for it to work. There are several different benefits to using a company that specializes in collector car financing.
Benefit #1 – Less time/Less hassle: You could spend a lot of time trying to find a conventional lender that will provide an antique car loan. Most normal lenders will not provide antique car financing for several different reasons. It mainly boils down to them not knowing the antique and collector car market well enough to make a wise decision on how much a particular antique car is worth. There are just too many variables for them to analyze, and the time they would have to spend to make an informed decision just isn’t worth the return they would get from the loan.
Benefit #2 – Lower Interest Rate: If you do find a conventional lender that is willing to give you an antique car loan, they likely will have a higher interest rate than a company that specializes in classic car finance. The conventional lender will likely quote you an interest rate that they give to the typical used car buyer. They will classify your antique as just another old used car, which assumes that it will be worth less in the future than it is now. Companies that specialize in classic auto financing realize that your classic car will likely hold its value or increase in value, and they lower the interest rates accordingly.
Benefit #3: Longer Terms: Most used car loans have terms of 3-5 years. A company that specializes in classic car finance understands that an antique car purchase is an investment, and they can offer you up to twelve year terms! That will lower your monthly payment significantly, and can allow you to purchase a much higher priced car than you could with a conventional lender.
Those are the top three benefits to using a company that specializes in collector car financing. You can save a lot of time and hassle, get a better interest rate, and spread out your payments over a much longer time period. Just being able to talk to a person that understands what you are doing and why you are doing it goes a long way also. Search out lenders that specialize in antique car loans, and you will find they have a lot to offer.