Can You Finance Classic Cars? Here's What You Need To Know

Car financing is a great method of buying a new or new-to-you car, which means you don't need to have the full purchase price saved up in cold hard cash. It's also perfect for those who do have the cash, but would prefer to keep some, or all, of it stored away in the bank, rather than throwing all their funds on a potentially depreciating asset.

Over 80% of new cars purchased in 2024 were done so with the help of some sort of financing — but what about used cars, and specifically, classic cars? Are there financing options for those of us that prefer chrome bumpers and choke cables?

The quick answer is yes, and there may be more options available to you than you might think. Furthermore, classic car financing isn't simply reserved for the higher-end products. It can prove just as possible to finance a $10,000 Ford Model T as it would one of the most expensive Ferraris ever sold. Although the more expensive the car, the more interested lenders are likely to be in your personal finances, existing collections, and credit history.

The newest and perhaps now the best way of financing a classic car purchase is to use something called Hobby Specific Financing. Lenders which entertain this sort of purchase are typically very specialist, with excellent knowledge on classic cars and the classic car market in general. Hobby Specific Financing tends to attract low APR rates and generous term lengths, too, which means stepping into a classic car could be way more affordable than it first looks.

Another way of buying a classic or vintage car, without forking out the full purchase price in cash, is to simply use a bank loan. The money isn't directly tied against the car — unlike with the aforementioned financing option — but a car loan or personal loan does allow you to make the purchase over a select period of time, with pre-agreed regular payments, and a fixed interest rate.

Sometimes, it may even be possible to take out a home-equity loan to buy the old car of your dreams, and similarly, it's now even possible to borrow against your existing classic car collection. Using your already owned vehicles as collateral, lenders will lend you enough to purchase another car, although it's important to note that this is usually only available to those with existing collections valued north of $1 million.

Buying outright is always a great option if you can afford it, as it keeps your monthly outgoings low. Unless you hit the classic-car-jackpot, the chances are you'll need plenty of spare cash each month to maintain, repair, and improve your new-to-you vintage car.

However, using any of the above classic car financing methods does mean you might be able to get your hands on a dream classic that would otherwise be too expensive to purchase. It also means you can keep hold of some cash, too, which might be earmarked for other big purchases or ventures. Or you might simply just feel more comfortable keeping some in savings, rather than splashing it all out at once on an old car. 

Should you change your mind later down the line, it's important to remember you can always pay off a loan agreement early, and this will usually save you on interest in the long-term, too. This is because you only pay interest over the time which you borrowed money for. To give an example, if you took out a five-year loan, but paid it off in full at the end of the third year, then you'd save two years worth of interest. To put it simply, the longer you have a loan outstanding, the more interest you pay.