Classic Car Watch
Loans for Classic Cars, and Classics with a $30,000 Budget
|NOTE: This column displays cars I have found on the Internet. I am not selling them. Please follow the links if you are interest in a car. Be mindful of the date this article was published. For an explanation why I do this read the original column here.|
March 2, 2016
By Scott Lewis
We are headed in a new direction this month. We are contemplating getting a loan to buy a classic car.
If you have been following this column, you know I always try to keep a tight budget, usually $15K, but sometimes stretching that to $20K. I have always been of the mind that I would buy a classic for cash, or possibly get a small personal loan if a car I wanted was just out of reach. (For example, I would have considered a $5,000 personal "unsecured" loan if I had $12K in cash, but saw a great car for $17K.)
If you read my Car Corner column this month, you know I was told that it is relatively easy to get a loan for a classic car. Why would you get a loan for a classic car? The main reason is so that you do not have to buy a project car for cash, and then lose interest in it trying to make it nice. Think about it... if you are going to buy a car for $10K, and then create a budget of $250 a month to make it a nice driver, why not just put $10K down on a nice car now and make $250 payment. It's the same thing... because the classic is not depreciating like new cars do.
Classic car loans tend to be much longer in length, making for low monthly payment. Granted, they are going to require a 10-20% down payment. This is not 0 down like a new car could be. So... if you put 20% down and may payment for say... 10 years... you end up enjoying the car. If you ever decide you are tired of paying the monthly payment, you can always sell the car and pay off the loan. This works because almost all classic cars are appreciating in value. I am not talking about investment level appreciation. Just that you should hopefully be able to sell the car for at least what you paid for it.
Think about that for a minute. Put $5,000 down... and pay up to $300/month (my plan). In a year you are bored with the car. Put it up for sale... for the same price you bought it. You will have paid toward that loan, and should come out with your $5,000 plus a little extra. You can use that toward your next classic car.
I can't believe I hadn't thought of this before.
If you are playing along at home (you should if you are reading this) you need to keep a couple of thing in mind. 1) Depending on the financial institution (the big three are J.J. Best Banc, Woodside Credit, and Collector Car Lending) the car needs to be at least 25 years old... you know... a classic. 2) You need to get classic car insurance. That has its own issues, but they are simple. Mainly you will have to have a non-classic daily drive insured with regular insurance, and you must park the classic in a locked garage. 3) You will likely need to buy the car form a dealer.
So... my plan... maybe... is to put about $5,000 down with a payment of about $300/month. I will have to work out the finer points in a couple of months. This plan allows me to set a budget of $30,000 (maybe a little less).
The person that told me of this owns an auto restoration shop, and asked me to give him a list of 5 cars I would like, and he will keep an eye out for me since he comes across cars for sale... all the time.
That opened a huge can of worms. I tried searching the internet for cars in the $20-30K range. There are a lot of cars out there. I found almost 50 cars I really, really liked. Of course each a little different (or a lot different) than the next.
So... this month I can going to provide you the list of cars I will likely provide the shop owner. Granted... it will kind of be more than 5 cars, but I have put the into 5 "categories" Here they are:
Now let's see what I found. I am seriously narrowing the 50 cars here to provide an example. It is a much harder decision than it looks (for me) to pick one... no less 5. Heck, I had a hard time picking the top 5 Mustangs, top 5 Camaros, and top 5 Corvettes. Below are shorter than normal listings... I just want to give an idea what I am looking for.
Camaro RS SS, 350, Green over Green, Auto w/ Console - $27,500
Thoughts: Better with A/C and a 6 speed... both doable.
Corvette, Red over Saddle, 454, 4 speed, #'s matching, A/C - $28,700
Thoughts: Needs Nothing... but gas, and that's cheap currently!
1965 Mustang FASTBACK, White w/ Blue Stripes on Black PONY Int, 289, Auto, Console - $27,500 (Link)
Thoughts: Better with A/C and a 6 speed... which will be a common trait on this list.
1966 Mustang Coupe, White on White/Red PONY Int, V8, 5 Speed, Aftermarket Console - $20,900 (Link)
Thoughts: Just add A/C and go!
Firebird Trans Am, Blue with white stripe, Black Int, 455, Auto -
Thoughts: Better with A/C and a 6 speed... Again!
1972 Cuda AAR Clone, Green over Black, 340-6, Auto w/ Slap Stick Console - $29,995 (Link)
Thoughts: A/C and 6 speed... sure, let's add them.
Challenger Rallye, Vitamin C Orange, 340, Auto w/ Slap Stick Console -
Thoughts: A/C and 6 speed... why can't more classics already have these.
1970 Oldsmobile Rallye 350, Auto, R134a A/C - $29,995 (Link)
Thoughts: I always liked these "budget" Muscle Cars. Now they are not so "budget" anymore. Still cool. One of the very few bright yellow cars I would drive.
1970 Chevelle SS, LS-5 454, Red w/ Black Stripes over Black Int, Auto w/ Console and Buckets - $29,900 (Link)
Thoughts: Here's one I would leave as a automatic. But convert it to a modern overdrive, and add fuel injection (to try and get better gas mileage). Oh yea, add A/C.
1970 Nova SS, Black on Black, 454 with dual quads, 4 speed, Bench - $27,000 (Link)
Thoughts: Add A/C and do burnouts forever.