When it comes to buying a classic car, the next best alternatives to cold hard cash are loans and leases. LCG Kustoms does not provide financing directly, but we do provide collector car market and valuation data to many banks who do. Here are some of the different financing options you may want to consider:
This is a fairly new alternative for someone wishing to buy an antique, classic or collectible vehicle. The loan representatives understand the collector car market – namely, why a 40-year old car might cost upwards of $100,000, or much more. Interest rates tend to be low and loan terms can be generous, keeping monthly payments affordable.
PROS: Very low monthly payments doesn’t tie up cash
CONS: The cost of borrowing money
Your bank may extend you a personal loan, although amounts are often limited to $5,000. That works well if you’re a little short of the cash needed for a deal. Assuming good credit, you can get a small unsecured loan -- you may pay for the lack of collateral though, with an interest rate that could easily exceed the prime rate.
CONS: High interest small principle
These loans have grown in popularity because of their low interest rates. Though often tax deductible, you should consult your tax advisor to confirm before going this route. You’ll need to consider the variable interest rate and risk when deciding to put a lien on your home.
PROS: Lower interest rates often tax deductible
CONS: Variable interest rates the loss of your home if you default
A bank might approve your loan, if you’re lucky enough to work with a collector car enthusiast who understands your passion for older cars. And most don’t understand the difference between a collector car and a used car. They will likely offer you a short term loan – usually a max of 36 months – and a high interest rate up to double the cost of a new car loan.
PROS: Convenient location
CONS: High interest rates possible lack of interest in collector car loans