Classic Car Financing
Despite the advances of modern engineering and the extras many cars now seem to offer as standard, there is nothing to beat the thrill and driving satisfaction you get with a classic car. Whether it is the throaty engine roar of an E Type Jaguar, or the beautiful body lines of a Rolls Royce, these vehicles of a 'certain age' offer something unique. If you have the classic car bug, you will know exactly what this means, although you may still struggle to explain it to 'non-believers'!
If you have dreamt of owning your own classic car for years, perhaps you have been diligently saving up for the day when you have enough cash to hand over for the model you have been coveting. Certainly some people are prepared to wait until they can pay upfront for their classic car. Although a beautifully preserved vehicle is not likely to be your main means of commuting to work or ferrying the kids around, there is a sensible element to this course of action.
However, we do not live in a perfect world and the chances are that you would rather be driving around in that nippy MGB this summer, rather than waiting another ten years. So you are going to need to finance the purchase and there are a few things you need to bear in mind when you look at how to do this.
When you buy a brand new or second hand modern car from a showroom, finance is easy. The dealership will be practically falling over itself to offer you a package. It is one of the ways they make more money out of you, but that is not going to be available with a classic car, which you may well be buying as a private purchase, directly from the owner.
If you are looking to buy a classic car for around £15,000 or less, you will probably find the best way to finance it is by taking out a personal loan. The precise terms and interest rates you will be offered will depend on your credit history. In most cases this sort of personal loan will be unsecured, that is you will not be required to put up any security against it.
If the object of your fancy is going to cost you more than £15,000, unless your bank is feeling especially well disposed towards you, you are probably going to find it more difficult to get an unsecured personal loan. That being the case, your best option is to take out a hire purchase agreement. It works in a similar way to a loan in terms of paying back the money at an agreed rate of interest, but with hire purchase you are required to put up security for the loan in the form of the car itself. The term of the loan can vary between one and five years, but obviously the longer it is, the more interest you will pay and, therefore, the greater cost your classic car will be in real terms.
A major benefit of classic cars, apart from the obvious pleasure of driving them, is they fare much better in terms of depreciation than modern vehicles. As soon as you take a brand new car away from the showroom, it has started to lose value and the depreciation is particularly sharp in the first few years. Classic cars, on the other hand, tend to hold their value or even increase in worth in some cases. Obviously you have to look after them properly, with regular maintenance and plenty of TLC, but providing you keep them in good condition you are not going to see the value of your much-loved car plummet. You can tell all those fans of modern cars that your cherished classic vehicle is a way of money saving money and an investment that will turn heads every time you drive past!