It can be difficult, but there are lenders who are willing to finance a car that is over ten years old. A loan against a car of that age will cost you, though.
Lenders to Consider
The first thing that must be said is that large lending institutions will not consider a loan for a vehicle that is more than seven years old. The majority of credit unions will only loan money on vehicles that are ten years old or newer. For a car that is eleven years past production, you will need to search for a specialty lender. There are many such lenders online, some even specialize in high dollar collector vehicles. In some cases, we can get you approved to finance a vehicle of this age.
Unfortunately, buy-here-pay-here (BHPH) dealerships seem to enjoy the ten year old plus market. These dealerships should be avoided at all costs because the vehicles are almost always low quality, high mileage, and guaranteed to be over-priced. In many cases a vehicle on a BHPH lot will be priced nearly double what its Kelley Blue Book value is.
What it Will Cost
As you might expect, a specialty lender is going to make a profit from your loan. That profit will come in the form of a high interest rate. That rate will depend on your credit score to some degree, but can also vary based on the age of the vehicle. In most cases a specialty lender is going to ask between 13 and 18 percent interest. If your credit score is in the 550-620 range, you can expect a rate close to 13 percent. If it is 549 or lower, you can expect the highest rate.
Secondly, you will most likely be asked for a down payment that is equal to twenty percent of the total purchase price. In some cases, you may be asked for as much as fifty percent down. Lastly, these lenders will ask you to repay the loan in a short period, so you may only be allowed a 30 month loan term.
The only way to avoid the costs of financing a car that is over ten years old is to look at the reasons you need a car that old. Is your credit score preventing you from financing a newer vehicle? If so, you could request your credit reports from the major agencies at www.annualcreditreport.com then fix any negative actions that you can. Go here for more information on financing a high-mileage car, or if you’re ready, find out if you qualify to finance a car of this age by applying online.