For those who want to drive a classic but don’t want the responsibility of ownership, financing a classic car is an excellent option. Classic cars will always be worth more than their purchase price and can be sold later for a profit. Financing lets you change your mind if you need to part with it. Some examples of financing are leasing, shared ownership, personal contract plans, and peer-to-peer lending.
Leasing is the recommended option for new drivers. It’s easy to get a lease compared to the difficulty of getting a finance agreement for a classic car. Classic car leasing has benefits you don’t get with other types of vehicle finance. The terms are clear, and you can end the agreement early by returning the vehicle if desired. If you’re an experienced driver, getting a lease on a classic car or any other kind of vehicle is possible with another financial institution that sells leases and loans together in one package deal.
Shared ownership means you purchase a vehicle’s equity in part and then share its use with others. That way, building your own automobile collection over time is possible. This is a good option if you have a large family or don’t have the money or space to keep many vehicles. You can finance the cost of your shares and share them with anyone else who wants to participate. It’s also possible to buy individual shares in an investment vehicle called an investment trust with an agreement to buy them back later at a specified price. A classic car can be included in this type of arrangement.
Personal Contract Plans
With a personal contract plan, you buy a car and then pay it off over time. The plan will require a down payment, monthly installments, and administrative fees. Some of the monthly payments can be financed, and then there’s an end value: the remaining balance of what you owe on the vehicle.
Peer-to-peer lending, or P2P, is another option to consider. It works like a new version of financing because drivers borrow money directly from lenders instead of going through any financial institution or bank. You have more control over the arrangement because you can lend money to individuals or small businesses instead of corporations.
Some of the benefits of financing classic cars include the following:
Spreading the payment cost
If you’re financing a classic car, you can spread the payment cost over time. This will give you more financial flexibility. You might be able to find a less expensive monthly payment if it’s figured by the number of years left on your contract.
You can get your hands on a classic car sooner if you finance it rather than buy it outright. You may also be able to use some of your hard-earned money for another purpose and still get the classic car at a lower cost compared to buying it outright from classic car dealers or private sellers.
If you’re financing a classic car, you can deduct interest payments as a tax deduction. If you’re leasing, you can’t do this because the payments aren’t technically interest but rather for the use of the vehicle. You’ll need to consult your tax advisor to confirm whether you can claim any deductions.
Save Time and Effort
Suppose you’re financing your classic car through an auto dealer. In that case, it’s possible to save time and hassle by applying with another organization that offers loans and leases simultaneously in one package deal. Your monthly payment on the entire package may be less expensive than what you’d pay if you took out separate loans or leases.
Take Advantage of Exclusive offers
Some auto financing companies offer a new car bonus or an offer to finance a classic car with them. Some people prefer this option because they can get a classic with no down payment on the vehicle. It’s also possible to buy premium accessories for your classics, such as parts and polishing products like wax and waxes, paint sealants, polish cleaners, and cleaners for wheels and tires.
For people who like the idea of driving a classic car but don’t want to deal with the responsibility of ownership, financing a classic car is an excellent option. You can change your mind and sell it later for a profit.