Buying a classic car is a financial choice that should be taken with due consideration of the cost and benefits. There are two ways of financing for classic cars namely in cash or through a loan. It is not easy to find all the cash needed to pay for a new auto at once. As a result, financing is the common way of owning a car.
Classic Car Financing Options
You can finance your classic car through five common ways. Each of these paths has its pros and cons worth considering. Below are some highlights on each of these options.
- Car Dealership Loans
Auto dealerships provide an auto loan to their customers. The loans can be set easily and at any time of the week. Besides convenience, the rates are very competitive in case there are several dealerships on the car model or brand you wish to purchase. However, you will have to pay more at the beginning of the terms than at the end.
- Bank Loans
The rates on these loans are more competitive than on dealership loans. The bank can as well help you determine if you are paying more than you should for the car. Additional benefits include free insurance covers such as life and disability insurance offered by some banks. Unlike dealership loans, interests on these loans are evenly spread over a certain period.
Bank loans, however, are not easy to set up as it is with the dealership. It is not the best option if you are looking for the fastest way to hit the road in your classic ride.
- Home Equity Loan
It is a car loan based on the value of your home. It offers one of the most competitive rates in the market. Besides, the interest is deductible from taxes. However, this is a more risky option than the other options as the loan is tied to your home. In case you fail to pay, you are likely going to end up homeless and without the car.
- Friends and Families
If you are blessed with friends and relatives or a spouse who is willing to help you finance your car, you are one of the luckiest people around. Such arrangements come with competitive and flexible rates. However, you should not take this path unless you are perfectly sure you will repay within the agreed period. Otherwise, you risk jeopardizing your relationship with the friend, family, or spouse.
There are numerous ways of financing for classic cars. Figure out which of the above ways suit your financial plans. Irrespective of choice, ensure you understand terms and conditions. Interest rates and the period of repayment are some of the key factors to consider.