Lenders Treat Classic Cars as Specialty Assets
Most lenders won't finance a classic car the same way they finance a late-model sedan. The older the vehicle, the fewer finance options you'll have through traditional car loans. Classic cars typically need to be financed through specialty lenders or secured using equity in your home.
Consider a buyer who finds a 1972 Ford Falcon GT in Joondalup and wants to borrow $45,000. A standard used car loan won't work because the vehicle is older than 15 years. The buyer approaches a specialty lender who offers a secured personal loan at 9.8% over five years. That puts monthly repayments around $950. The lender requires a valuation from a registered appraiser and proof that the vehicle will be garaged. The buyer provides both, the loan settles, and the car is registered within three weeks.
Why Age and Condition Determine Your Finance Options
Lenders assess risk based on how easily they can recover their money if you default. A five-year-old Mazda has a predictable resale value. A 50-year-old Holden Monaro doesn't. That's why most mainstream lenders stop offering secured car finance once a vehicle reaches 10 to 15 years old. Beyond that age, you're looking at unsecured personal loans, equity-based lending, or paying cash.
The condition of the car matters as much as the age. A restored classic with documented work and a current market valuation will attract more lenders than a project car that needs a full rebuild. If the vehicle is roadworthy, registered, and insured, your options widen. If it's sitting on blocks in a shed, you'll likely need to fund the purchase and restoration yourself before a lender will consider it.
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Using Home Equity to Fund a Classic Car Purchase
If you own property in Joondalup and have available equity, refinancing or accessing a line of credit can be a more flexible way to fund a classic car. Refinancing your home loan to release equity typically offers lower interest rates than a personal loan, often in the 6% to 7% range depending on your circumstances.
This approach works particularly well if the classic car is part of a broader financial goal, such as buying an investment vehicle that's expected to appreciate. You're not limited by the vehicle's age or type, and there's no requirement for a specialist valuation upfront. The trade-off is that you're using your home as security, so if you can't make the repayments, your property is at risk. It's worth discussing this option with a broker who understands how equity release works and whether it makes sense in your situation.
What Lenders Want to See Before Approving Finance
Specialty lenders who finance classic cars will ask for a registered valuation, proof of insurance, and evidence that the vehicle will be stored securely. They want to know the car isn't being used as daily transport and that it's being maintained. Some lenders will also ask for photos and service records.
If you're applying for an unsecured loan instead, the lender focuses on your income, credit history, and existing debts. The vehicle itself isn't assessed because it's not used as security. That means approval is faster, but interest rates are higher, often between 9% and 14%. Loan amounts are also typically capped at $50,000 to $75,000 depending on the lender.
Buying Through a Dealer or Private Sale
Classic cars are more commonly sold privately than through dealerships. That affects how finance works. Dealer financing isn't usually available for vehicles this old, so you'll need to arrange your own loan before making an offer. Getting pre-approved gives you a clear budget and puts you in a stronger position when negotiating.
Once you've agreed on a price, the lender will want to see a copy of the sale contract and proof that the vehicle is roadworthy before releasing funds. Some lenders will pay the seller directly. Others will deposit the loan amount into your account and expect you to complete the transaction yourself. Ask your lender how the settlement process works so there's no confusion on the day.
How Insurance and Registration Affect Your Loan
You can't register a classic car in Western Australia without third-party insurance, and most lenders won't settle a loan until you provide proof of comprehensive cover. Classic car insurance differs from standard policies because agreed value cover is based on the vehicle's appraised worth, not market value at the time of a claim.
Some insurers in Joondalup specialise in classic and modified vehicles. They'll ask about how often you drive the car, where it's stored, and whether it's used for club events. Annual premiums vary depending on the car's value and how it's used, but expect to pay between $800 and $2,000 a year for a vehicle valued at $40,000 to $60,000. Lenders typically require comprehensive cover for the full loan term, so factor that into your budget when calculating affordability.
When a Balloon Payment Makes Sense
Some lenders allow a balloon payment on classic car loans, which means you pay a lump sum at the end of the loan term instead of paying the full amount off monthly. This lowers your regular repayments but leaves you with a large bill at the end.
A buyer financing a $50,000 classic with a $15,000 balloon over five years might pay $750 per month instead of $1,050. At the end of the term, they either pay the $15,000 outright, refinance it, or sell the car. Balloons work if you expect a lump sum payment around that time or if the car is likely to appreciate and you plan to sell. They don't work if you're already stretched on repayments and won't have the cash available when the balloon is due.
Call one of our team or book an appointment at a time that works for you. We'll help you work out which finance option suits your situation and find a lender who'll actually back a classic car purchase.
Frequently Asked Questions
Can I get a standard car loan to buy a classic car?
Most lenders won't offer a standard secured car loan for vehicles older than 10 to 15 years. You'll typically need a specialty lender, an unsecured personal loan, or home equity finance to fund a classic car purchase.
Do I need a valuation to finance a classic car?
If you're applying through a specialty lender who uses the car as security, they'll usually require a registered valuation and proof of insurance. Unsecured personal loans don't require a valuation because the vehicle isn't used as security.
Is it cheaper to use home equity to buy a classic car?
Using equity from your home typically offers lower interest rates than a personal loan, often between 6% and 7%. The trade-off is that your property becomes security, so you need to be confident you can meet the repayments.
What insurance do I need before a lender will approve my loan?
Most lenders require comprehensive insurance before they'll settle a classic car loan. You'll need to provide proof of cover, and the policy usually needs to remain active for the full loan term.
Can I use a balloon payment on a classic car loan?
Some lenders allow balloon payments, which reduce your monthly repayments but leave a lump sum due at the end of the term. This works if you plan to sell the car or expect to have cash available when the balloon is due.
