Have your eye on a sharp-looking Mustang Boss 302, pre-war Packard roadster, or perhaps a Porsche 911, but are dismayed that you don’t have enough ready cash to buy it? Or maybe you don’t want to tie up your money feeding your classic car obsession?
Well, there are companies that provide loans so you can enjoy your collector car now instead of later and make monthly payments on it, just as you would when buying a new or late-model used vehicle for everyday use. Credit is, after all, the backbone of the U.S. economy.
So why are people surprised that collector vehicles can be bought on credit?
“We hear that all the time,” said Brian Trevisan, the vice president of operations for Woodside Credit, a leading provider of collector car loans. “Every time we’re at shows, countless people come to us and say, ‘Well, I didn’t know you could finance classic cars.’ It’s one of the best-kept secrets in the industry.”
Woodside Credit is one of a small number of companies that not only offer classic car loans but specialize in the business, just as some insurance companies specialize in writing policies for collector cars.
If you attend Barrett-Jackson’s auctions, or are one of the millions who watch on cable TV, then you have seen some of Woodside’s work. On the big video screens that tally the bids as the cars go over the block, there’s an “estimated monthly payment” notation for the bid amount. That’s the work of Woodside, which has been hooked up with Barrett-Jackson for about eight years, according to Trevisan.
“It brings more bidders into the arena than there would be otherwise,” he said. “It’s a small piece of our business overall, abut its a great partnership with Barrett-Jackson.”
During the auction, the estimated payments help put such purchases into perspective, allowing bidders and spectators to determine what they might be able to afford as the cars roll across the block.
Woodside also partners with ClassicCars.com. Advertisements for any car for sale priced above $25,000 will have a window that shows estimated monthly payments, which are based on what the company offers in extended-term loans at specific price levels.
The extended terms, which can go as long as 12 years for the bigger loans, are designed to provide the minimum monthly payments.
Trevisan explained that the breakdown for the length of the loans are:
• More than $100,000, “We’ll go out to a 12-year term.”
• $50,000 to $100,000, up to 10 years.
• $25,000 to $50,000, up to eight years.
• Less than $25,000, up to seven years.
“It gives customers nice low payments,” he noted. “That is not necessarily giving them low payments so that they can afford the vehicle. It’s often more of a cash-flow issue. A lot of our customers can pay cash for the cars all day long, but they understand the benefits of, say, keeping their money in their business. Or they have their money in investments. Or they just don’t want to plop all that cash down at once to park in the garage.”
A lot of what makes this business work, Trevisan added, is that they are extremely careful that they are lending to very well-qualified borrowers
“We’re very picky with our credit standards,” he said. “Customers have to be very well-qualified. These are toys in their eyes that they are buying. If they are going to buy toys, we have to make sure they are very well-qualified, that they are in a position in life that it makes sense to be buying something like this.”
The highest loan amount offered by Woodside is $600,000, he noted. If someone wants to buy a car for more than that, they would have to provide the remainder, which many do. “If it’s a $1.2 million car, we’ll finance half and the customer pays down half.”
The monthly terms are generally longer than what you could find from conventional lenders, he said, which result in payments that can be lower than leasing payments. And in the end, the customer owns the car rather than a leasing company owning it.
The average loan rate is around 6 percent APR, Trevisan added. “But we’re not selling our rates. The unique part of our program is the payments. Low payments, common sense and customer service, those are the things that make our program unique.”
There are several other loan companies that offer similar terms, such as JJ Best and Financesource.com, and Hagerty classic car insurance and valuation also offers a loan program.
Woodside partners with some other collector car websites besides ClassicCars.com, as well as working with classic car dealers to provide financing. A customer also can come to Woodside on his or her own to set up a loan, Trevisan said.
Another service that Woodside offers at auction time is to provide letters of credit to borrowers who set up their potential loans ahead of time.
As for the cars themselves, Woodside specifies that it finances just collector cars, although that can be a subjective area, Trevisan said. While the company will lend money for any “classic” that’s 25 years old or older, it also includes more-modern exotics and such perennial collector cars as Corvettes.
“Corvette, it doesn’t matter if it’s a ’50s Corvette or a 2015 Corvette, we finance those,” he said. “They are recognized as collector cars with a big following.
“We’ll do any Porsche 911. There are some other things that fall in there. For the most part, if it’s in the NADA collector and exotic car guide, we’ll finance it.”
Once people learn about Woodside’s collector car loan program and its extended-term lending, it can open up entire new possibilities for them, he added. Often, prospective buyers are surprised at what they can afford, based on the monthly payments of the extended-term loans.
“We tell the dealerships, look, use this as a marketing tool for yourselves,” Trevisan said. “You’re going to get more phone calls, you’re going to get more people coming into the store who are intrigued by, ‘Wow, I can finance that car and it’s only going to cost me that much per month?’”