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Compare classic car loans
Learn how to pay for that classic car you've had your eye on.
Can you finance a classic car?
Yes, but your loan options will be more limited. Some typical car loan providers won’t finance a car that’s older than a certain number of years, like 10 years old, while others may have less specific criteria or even specialize in financing classic cars. Many banks offer secured financing options too, using large car collections (valued at over $1 million) as collateral.
How to get a classic car loan in Canada
Classic cars are collectible, which raises their value. Like all car loans, your eligibility depends on your credit and finances, with most lenders expecting a down payment of around 20%. The more you can spend upfront, the greater your chance of scoring a lower interest rate. At the end of your loan term, you own the car and are able to sell it or keep it as a valuable asset. This gives you the freedom to do whatever you like with the vehicle, from painting it to customizing its features.
Top pick for classic car loans: Coast Capital
Key features: Coast Capital is a reputable credit union that can finance a wide range of vehicles. It specifically mentions that it can finance luxury and classic cars. There is no maximum loan amount.
How to apply: Apply online in as little as 10 minutes and get a response on the same business day. A team member will contact you and discuss your application, including required documents, rates and terms.
Eligibility requirements: Able to service debt payment of $300/month, minimum credit score of 650, minimum age of 19.
Compare a range of car financing options in Canada
What is unique about classic car loans?
Classic car loans share many of the features of standard car loans, but they do have some characteristics that set them apart.
- Stricter credit requirements. The larger the purchase, the higher your credit score will need to be in order to secure a loan. Many classic car loan providers only accept customers with a good or excellent credit score. Good credit lowers your risk, usually resulting in lower interest rates.
- No vehicle age restrictions. It’s common for used car loan providers to restrict financing to vehicles that are no more than five years old. Classic cars are far older but are high-value purchases, so the age restriction is more relaxed. Back in 2014, Zuto, an auto loan company from the UK, reported financing a 1921 Talbot Darracq!
- Restrictions on vehicles. Classic car loans can often be used to buy antique, muscle or other exotic cars, while everyday car loans are usually limited to modern vehicles.
- Expert valuations. There isn’t one standard set of guidelines for deciding which cars are classic and which are simply old. Classic car loan providers will often have experts who can establish the car’s value. Many auto insurers consider classic cars as being built before 1980 or that are at least 25 years old (with some exceptions). But because standards vary among loan providers, be sure to check with your lender to see if the car you’ve got your eye on makes the cut.
Many borrowers turn to personal loans to for classic car financing since the requirements tend to be easier to meet.
Representative example: Omar buys a Corvette
Omar, a B.C. resident and classic car collector, visits a local car show and meets a private seller offering a 1960 Ermine White Chevrolet Corvette in great condition with all original parts. The asking price is $70,000.00, which Omar agrees to pay, offering a 20% deposit ($14,000.00) to secure the sale while he searches for a loan to cover the rest.
Because of his strong credit history and good income, it doesn’t take long for Omar to find a reputable lender specializing in classic car loans who’s willing to lend him the money to pay the amount owing on the car plus 12% PST ($56,000.00 + $6,720.00). Omar also pays approximately $50.00 to register his vehicle with the Insurance Corporation of British Columbia (ICBC) – this includes the cost of a license plate, insurance decal and vehicle permit as well as a registration fee.
|Cost of new vehicle||$56,000.00 ($70,000.00 less $14,000.00 deposit)|
|Loan type||Auto loan (term loan)|
|Interest rate (APR)||6.90%|
|Loan term||7 years|
|Additional fees||4.00% origination fee ($2,576.00)|
$0.00 application fee (waived by dealership)
|Payment||$968.82 monthly or $446.61 biweekly|
|Total loan cost||$81,380.88 with monthly payments or $81,283.02 with biweekly payments|
*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.
How to value a classic car
In order to accommodate the wide variety in car values, classic car loans can be flexible in the amounts that are given. Depending on its condition, rarity, originality, collector appeal and many other factors, a classic car could cost as much as a few hundred thousand dollars.
There are guides to valuation, but often it requires an expert with some in-depth knowledge of the market. A specialized lender may have a classic car specialist on hand, or you can contact one yourself and have the car appraised before applying for a loan.
What to look for in a classic car loan
There’s more to a loan than just the interest rate. You should also look at:
- Fees. Fees add to the total cost of your loan. Many lenders charge multiple fees, but there are some that are negotiable or vary from lender to lender. Find a lender that has minimal fees so you can walk away with a better deal.
- Repayment terms. Some loans last 24 months while others can stretch as long as 144 months. The longer your loan term, the lower your monthly payment but the more you’ll end up paying in interest in the end. Weigh the pros and cons of various repayment terms when comparing your loan options.
- Flexibility. Can you make additional repayments? Are there any early repayment fees? The flexibility of a loan can make a difference in your ultimate choice of lender.
- Security. Lenders often require you to use your car as the security for your loan, and a classic car loan is no different. By using your car as collateral, you’ll have access to lower interest rates, but you do risk losing the car entirely should you default.
Classic car insurance in Canada
Many car loans agreements will, as a condition of the loan, require you to take out comprehensive coverage. And the value of your classic car may increase the premium you pay. Classic car insurance policies can include benefits such as lay-up periods to reduce premiums, which may be more suitable if you’re a collector or looking to invest in the classic car as an appreciating asset (meaning, an asset that goes up in value over time).
Classic car insurers are very careful with who and what they agree to insure. Your insurance provider may only allow classic cars to be driven during certain months or on certain roads due to the difficulty in replacing parts that have been worn down or damaged. There may also be restrictions on your eligibility for coverage if you haven’t maintained a completely clean driving record for a number of years.
High-value classic cars
A large variety of classic cars on the market have buyers lining up to make a purchase, but here are a few that auto enthusiasts put at the top.
- Chevrolet Camaro
- Dodge Charger
- Ford Torino
- Plymouth Roadrunner
- Chevrolet Chevelle
These classics may cost you more, but could be worth the investment if you love driving or working on classic cars that can last you for years to come.
What are my other classic car loan options?
Some lenders have a specific product for financing the purchase of a classic car, but these aren’t your only options. If you aren’t eligible for a classic car loan, or the terms aren’t right for you, you might also consider:
- A personal loan. An unsecured personal loan might carry higher interest rates than other alternatives and may not be enough to finance your full purchase, but combined with your savings, you could be able to purchase your dream car sooner than you think.
- Home equity loan. Some classic car enthusiasts choose to take out a home equity loan to finance their dream car. If your house has enough equity, a home equity loan could cover the cost, but if you default, you risk losing your home.
- A standard car loan. Standard car loans aren’t usually available for classic cars, but you might be able to find a few local lenders willing to offer you financing if they understand the value of your purchase and are willing to use the vintage car to secure the loan.
A classic car is an investment. Many appreciate in value when maintained f and stored properly, and each one is a unique collector’s item. Review your finances before borrowing a loan for a classic car. Review the costs and features to make sure it suits your needs and budget, and don’t hesitate to speak with an accountant or classic car expert before finalizing your purchase.
Frequently asked questions about classic car loans
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