Can You Finance a Used Car Over 5 Years Old?

Do you want to buy an old car but are unsure if you can get a good car finance deal for it? 🤔 In this article, we’ll cover the important things you need to know about financing an old vehicle. We’ll also look into the available options for car buyers who want to finance classic or vintage cars. Lastly, it would be advantageous for you as a car buyer to learn as much as you can about the restrictions and exceptions of car financing, so be sure to read on!    

Can I get car finance on an old car?

So, let’s answer the primary question, “Can you finance a used car over five years old?” Actually, yes. Cars that are over five years old can still be financed, but usually, they shouldn’t be more than ten years old or have a mileage of over 100,000. If you’re looking for a standard car finance agreement for an old car, you might want to choose one that’s not over seven years old because you might find it harder to get good financing otherwise. Supposing you really want a car older than ten years, there are lenders that do provide financing, but their rates might be different than what’s applied to a typical secondhand car. 

Can I get car finance on a classic car?

Maybe you’re looking to buy a classic car which is probably a lot older than five years. You shouldn’t worry about finding a car finance company to help you buy your dream car because there are definitely plenty of lenders specialising in vintage car financing. If you buy the car from a classic car dealer, they can connect you to a lender that offers customised deals. However, if you think you can find a better deal elsewhere, you’re free to do so. Just make sure you request quotes and compare the APRs of different car finance companies and go for the one with the lowest rate.  

How can I finance a classic car?

There are several options to choose from if you want to finance a classic car. You can apply for a personal loan, Hire Purchase agreement, Personal Contract Purchase, Personal Leasing, or even a classic car restoration finance. 

Personal Loan

You can apply for a personal loan from your preferred bank. This type of loan is also called an “unsecured loan” since the loan is not secured against another valuable property that you own. If you are granted a personal loan, you have to repay the bank a fixed amount every month plus interest for a specific term. Most personal loans require an upfront deposit. This is a good option to finance your vintage car, but it’s important to note that to get a good deal, it’s going to be hard if your credit score isn’t excellent and your credit history isn’t that great.

Hire Purchase

With an HP agreement, the loan is secured against the car. You also have to pay in instalments for a certain term, as short as two years or as long as ten years for some lenders. Once you’ve made the last payment, the ownership of the vehicle will be transferred to you, and you’re free to do what you want with it. You can modify it as you wish or sell it if you want to.   

Personal Contract Purchase

PCP deals have more affordable monthly instalments than HP, but at the end of your contract, you would have to pay a final optional balloon payment to own the car. If you’d rather not, you may simply return the car to the lender and not pay anything else. 

Personal Leasing

This agreement is like renting a car long-term, so it’s similar to HP and PCP. However, unlike those two, there’s no option to purchase the car at the end of your Personal Leasing agreement. Also, there are certain mileage limits that you should stick to; otherwise, you’d end up paying extra once you return the car. 

Classic Car Restoration Finance

If you’re into classic cars, then you probably get enjoyment from the restoration process of vintage cars. There are lenders specialising in restoration finance, so you can proceed with your project and bring out the beauty of your classic car. As with any type of financing, be sure to request quotes from different lenders and compare them until you find the best rates and the most suitable terms for you. 

What are the restrictions for car finance?

Before you get financing for an old car, it’s important to know a few important rules so you can decide how to go about buying an old vehicle. The first is that the car shouldn’t be over 12 years old by the time you complete all payments. So, if you plan on getting a five-year car finance agreement, the car you choose shouldn’t be older than seven years. As for mileage, the car shouldn’t have clocked in 100,000 miles when the finance agreement commences. Depending on the type of car finance agreement you choose, there could also be mileage restrictions, such as 10,000 miles a year, for example. Most lenders also have a restriction on how much they will allow you to borrow to buy an old car. For example, it could be about £3,000, but this may vary from one lender to the next. 

Are there exceptions to the general rules?

As with most rules, yes, there are exceptions. Some car finance companies assess applications differently and may choose to disregard the general rules. For example, if you have a really strong credit profile, a superb credit history, and a great track record when it comes to repaying loans, then the lender might just consider financing the car you want. Additional checks on the car might be required though, so just be ready for them. The lender could request HPI or MOT checks. In the end, your car finance application will be evaluated by the lender, and depending on how strong your credit profile is, they may even give you a really good deal. 👍