How can I get a classic car loan?

author-avatar By on February 16, 2021
How can I get a classic car loan?

You’ve spotted your dream ride for a Sunday drive, now comes the conundrum of funding it. What are the options for financing a classic car?

Whether it’s a Mercedes-Benz Gullwing or a Volkswagen Thing, your classic ride is a reflection on your personality as well as your pride and joy. It’s all well and good looking online at your dream vintage ride, but how do you actually go about financing it? Registration is one thing, but finance is another issue. If you don’t have the cash, your next option is probably to get a car loan. However, there’s one main roadblock - many lenders don’t lend for cars older than a few years. So, what’s the deal?

In the market for a used car? The table below features car loans with some of the lowest fixed interest rates on the market for used car buyers.

Lender
Advertised rate Comparison rate Monthly repayment Interest TypeVehicle TypeMaximum Vehicle AgeOngoing FeeApplication FeeTotal RepaymentEarly RepaymentInstant ApprovalOnline Application
FixedUsedNo maxGo to site
QUICK APPLICATION PROCESS WITH NO FEES

Used Vehicle Fast Loan Low Rate

  • No ongoing fees
  • No early exit penalty
  • Flexible repayment options
QUICK APPLICATION PROCESS WITH NO FEES

Used Vehicle Fast Loan Low Rate

  • No ongoing fees
  • No early exit penalty
  • Flexible repayment options
FixedUsed4 yearsGo to site

Used Car Loan (up to 4 years)

  • Flexible repayment options
  • Can apply online
  • Approval is instant

Used Car Loan (up to 4 years)

  • Flexible repayment options
  • Can apply online
  • Approval is instant
FixedNew, UsedNo maxMore details

Car Loan

FixedNew, Used5 yearsMore details

Fixed Car Loan (with Low Emission Vehicle discount)

FixedNew, UsedNo maxMore details

Liberty Car Loan (Excellent Credit History)

Rates based on a loan of $30,000 for a five-year loan term. Products sorted by advertised rate. Rates correct as of September 28, 2021. View disclaimer.


How can I finance my classic ride?

You might have noticed when shopping around for a used car loan with the normal pedigree of lenders, the maximum age your car can be is seven years or so. Being that a ‘classic' is likely more than your mum’s 2015 Camry - and instead a 1967 Mustang - mainstream lending is likely off the cards. So, what next? You might still have a few options.

Specialist lenders

There are various lenders out there that specialise in classic rides and might offer no hard cap on the age of your vehicle. A couple of lenders are:

  • Fox Finance
  • AFS

We aren’t promoting these lenders, just providing some examples. You may find they operate in similar circumstances to a car loan for a new car. That is, the loan is secured against the car, meaning if you default on your payments they take your car away.

As a trade-off for having a secured loan, you’ll likely get a lower interest rate than other loan types. However, being that it’s for a classic car and there might be more risk involved for the lender, your interest rate may still be higher than if the loan were for a new car.

On top of this, to get a specialised interest rate, you’ll also likely need to have the car valued by the lender. This is because classic cars are often heavily restored and modified, and defy usual depreciation and used car market forces.

Personal loans

A ‘personal’ loan could be a more flexible option for financing a classic car. Many lenders allow you to borrow up to $100,000 and there are generally two options - secured or unsecured.

  • Secured: Uses an item of value as security against the loan. Some lenders may allow a classic car to be that security, however others might not - you’ll have to check a lender’s terms and conditions.
  • Unsecured: An unsecured personal loan could be considered the most ‘flexible’ type of loan as it’s not tied to anything as security. A consequence is you’ll likely face a much higher interest rate than if you chose another option.

You’ll have to check the product details to know what you’re getting into. A secured personal loan might let you secure the loan against an item of jewellery, a term deposit account or something else, but may not support a 50 year old car. Your mileage may vary, pardon the pun.

Consider a car broker

A broker might specialise in classic car lending, or will have special relationships with lenders that could offer you a personalised rate. Car brokers can be useful this way as they do a lot of the leg work for you. However, often their ‘commission’ is baked into the interest rate, or there may be an upfront fee. Nevertheless, a broker could be a good option, whether they’re online or in-person.

Savings.com.au's two cents

No matter what your classic or unique car flavour, it’s important to go over your financing options. If you’re buying a restored model of say, a Holden from the 1960s, it’s not uncommon for pristine models to cost $50,000 or more.

This is where classic car finance can be handy. However, there’s a range of types of loans out there, and not all lenders are upfront about the type of loan they offer. Considering mainstream lenders generally don’t lend for cars older than seven years, you may have to trawl the ocean a bit to find a lender that will be suitable.

As with any car loan, be aware of the interest rate and whether the loan is secured or unsecured. If in doubt, check the loan’s terms and conditions to see if the loan is right for you.

First published 7 August 2020, last updated 16 February 2021.


Photo by Hayes Potter on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $30,000 loan over 5 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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