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Classic Car Finance
So, you've decided you'd like to own the 1959 Pink Cadillac Model 62 that's the star of its own movie and the envy of many collectors. It's just the kind of shape in which it has been kept – primo. So, how do you do it?
It's actually not hard – depending on your creditworthiness or course – and, in many ways resembles how you finance a new or used car. In this case, though, the car you want is a classic and it has the built- in advantage of gaining in value every day.
That's a key advantage that lots of people don't have when they want to finance a vehicle. The vehicles they want to purchase are either new and are subject to the vagaries of the new-car market and factory incentive changes, while purchasers of used cars are subject to the availability of the vehicle they want and just how much they are willing to pay for it. The value of the new or used car will also determine how much a financial institution is willing finance, while the classic will have its value determined for you in by the ads and listings you will find in Hemmings Motor News or on their website.
So, you've made your decision, what's next? Figuring out how much you're going to invest out of your own pocket. It's always best to put down as much as you can so that you have as much vested in the vehicle as you can. It's always better to own more than less.
So, let's say the vehicle you are interested in costs you $37,500 and you have about $20,000 in cash to put into it as an investment. This means you'll have to find a place where you can come up with the balance. Now, you can put off buying the vehicle until you have the total amount, but, it's amazing just how much like Jell-O® the old-car market is. If you squeeze a little here, it bulges out there. In other words, if you wait for the market, it might just squirt ahead of you and the $15,000 you needed may suddenly turn to $25,000.
You might try using a home equity line or, if you have an older whole life insurance policy with a low-interest loan clause, you may use that venue, if you have enough invested, and you can finance it that way.
Or, you might search online to find financial institutions where you will find loans for your classic car. Again, how much they will give you is defined by your creditworthiness and that is at the mercy of the vagaries of the credit market.
One thing you have to remember in all of this is that you will have to find the Fair Market Value of the vehicle because it will go a long way to cementing your finance.
Yes, there are options for purchasing classic cars, the key is knowing where to find them and use them.