Classic cars are ideal to finance. And the perspective is often the opposite of conventional new or used car financing.
In traditional finance models, be it a lease or loan product, the depreciation of the asset is a big portion of the monthly cost. Luxury cars depreciate at a rapid pace, often dropping to half their original price in as little as 3 years. That loss in value is what makes leasing popular, someone else takes that risk. As a lessor for over 30 years now, I have mapped depreciation cycles and managed fleets of cars and trucks of all makes as well as everything from heavy equipment and computers to phone systems and hot walkers. With rare exception, nearly all of them were worth less at the end of the financing than the original cost.
Given that the average classic car appreciates in value every year, there’s a strong argument to be made for financing the toys we’ve always paid cash for in the past.
And given today’s low interest rates, driving a classic car can be an investment experience that pays you back much more than than just in smiles per mile but also in dollars back to your wallet. Certainly, a lot of classic cars are appreciating at more than 5% per year. Air cooled Porsches anyone?
Check out these great sources for classic car financing: