If owning a classic car is on your bucket list, here’s how to obtain a loan that suits your needs.
Check your credit score
Your credit score is typically the single biggest factor in determining the interest rate you’re given for a loan. The higher your score is, the better your chances of being approved for a loan and the lower your annual percentage rate (APR) will likely be.
By checking your credit score, you’ll have a much better idea of where you stand with loan eligibility. If you want to secure the best rate possible, consider working on improving your score before applying.
Shop around for the best rate
Obtaining loan offers from multiple lenders is a great way to save money on your auto loan. LendingTree data suggests that shopping around for a car loan can help you save thousands of dollars over your loan term.
With that in mind, consider gathering loan offers from a few lenders that offer preapprovals. Then, compare the results and select the option that works best for you.
Weigh your down payment options
Most classic car lenders require you to make a down payment on the car before they’ll allow you to finance the rest. This amount usually falls between 10% and 20% of the car’s purchase price, but it can be more in some cases.
Usually, your lender will specify a minimum down payment, but you can make a larger one if you would like. If you can afford it, putting more money down is a smart way to lower your monthly payments and may even help you secure a better interest rate. Use an auto loan calculator to estimate your payments.
Get classic car insurance
Where classic cars are considered, you typically need to get classic car insurance. Unfortunately, traditional car insurance likely won’t take into account the value of a classic car or necessary maintenance and repair costs.
Like when shopping for an auto loan, we recommend you compare car insurance quotes to ensure you’re getting the best rate.
Close on your classic car loan
Once you have chosen a lender and provided it with all the necessary paperwork, the next step is to close on your loan. Be sure to read over your loan documents carefully, so that you understand all the terms and conditions. Then, if you’re satisfied, sign on the dotted line and wait for your loan to be funded.