Classic Car Shows

A classic car is more than just a chunk of metal hanging around in your garage; it is a member of the family and something which draws strangers in the street to start a conversation.

Little wonder then that many owners are fanatical about their vehicles but how does some-one join this elite band and purchase a vintage motor?

Unfortunately, despite the fact that older cars will hold their value far longer than a modern car, most finance firms will not be willing to lend money for this kind of purchase. It is the unknown which makes lenders twitchy; modern cars have a clear pattern of depreciation whereas classic cars are a rule unto themselves.

The options to fund the purchase can vary significantly, not just on the credit history of the applicant but also depending on how much the car is worth.

For a classic car valued at less than £15,000 it is possibly to fund it with a simple personal loan. If you have a decent credit history your bank may well be willing to lend you the money which will mean a reasonable repayment rate and no tying of the asset to the lender. It is usually a good idea to apply to your own bank first - unless there is a very good reason not to - but it is also possible for other financial institutions to consider an application, even if you do not hold an account with them.

For cars falling into the next category up, £15000 to £25000, personal loans may still be possible at a pinch but your bank is likely to be very cautious about lending this amount of money on an unsecured basis. An option to consider instead of a personal loan is a Hire Purchase agreement. This operates slightly differently from a loan because the vehicle is used as security for the repayment of the money and is added to a register. Because there is a secured element to the borrowing it is normally possible to obtain acceptance even if you have been refused a personal loan.

Hire purchase can be obtained from regular finance firms for this bracket, but even so, most experts recommend approaching a specialist broker instead. When it comes to classic cars worth more than £25,000 a specialised broker is an absolute must. Obtaining finance from an expert means getting more than just a hand in the right direction to get your loan approved.

Firms looking to lend this amount of money for the purchase of a classic car usually have some in-depth questions about the vehicle they want to ask and the broker can usually anticipate what they are likely to be in advance. Having knowledge of the mechanics of the cars and the weak spots means customers can get advice about what to check before they make the purchase, a helpful asset indeed.

However, whichever option you pick to pay off your car it is essential that you do not commit to borrowing more than you can afford to repay. If you are unsure how much the finance will cost, using an online loans calculator can help give you an idea how much to expect to repay