How Does Classic Car Finance Work?

Edited: March 2026

Classic car finance allows buyers to spread the cost of purchasing a classic vehicle rather than paying the full price upfront. While it works in a similar way to standard car finance, lenders often assess classic vehicles differently because of their age, rarity, and long term value.

In many cases, buyers finance classic cars either through a personal loan or through a finance agreement arranged by a specialist dealer. The most suitable option depends on the buyer’s financial position, the value of the vehicle, and whether the intention is to own the car outright or simply use it over a period of time.

At GPS Financial, we help clients understand the available options so they can choose a borrowing structure that suits their circumstances before committing.

Types of Classic Car Finance

There are several ways to finance a classic car. The most appropriate option will depend on factors such as the purchase price, how the vehicle will be used, and whether long term ownership is the goal.

Personal Loan

A personal loan allows you to borrow funds from a lender and then purchase the vehicle outright from a dealer, auction house, or private seller.

Because the loan is separate from the vehicle purchase, this option provides flexibility over where the car is sourced. Repayments are normally made through fixed monthly instalments over an agreed term.

Personal loans may be secured or unsecured.

A secured loan is backed against an asset, often property. Because the lender has security in place, interest rates may sometimes be lower. However, if repayments are not maintained, the asset used as security may be at risk.

A secured loan is backed against an asset, often property. Because the lender has security in place, interest rates may sometimes be lower. However, if repayments are not maintained, the asset used as security may be at risk. You can read more about asset based lending here
Unsecured loans do not require security but typically carry higher interest rates and stricter affordability checks.

Hire Purchase

Hire Purchase is one of the most common ways to finance a vehicle through a dealer.

Typically, the buyer pays an initial deposit and then makes fixed monthly repayments over an agreed period. Once the final payment has been made, ownership of the vehicle transfers to the buyer.

Unlike some other forms of vehicle finance, there are usually no mileage limits with Hire Purchase. This can make Hire Purchase more suitable for buyers who intend to keep the vehicle long term.

Personal Contract Purchase

Personal Contract Purchase agreements allow buyers to reduce their monthly repayments by deferring part of the vehicle’s value until the end of the agreement.

At the end of the term, the buyer normally has three choices. They can pay the remaining balance, return the vehicle, or trade it in against another purchase.

PCP agreements are more commonly used for newer vehicles, although some specialist dealers may offer them for certain classic cars.

What Makes a Car a Classic?

A vehicle is generally considered a classic once it reaches around twenty years of age, although the exact definition can vary between insurers, collectors, and lenders.

Some classic vehicles increase in value over time, particularly rare models or well maintained examples with low mileage. However, value depends on several factors including make, model, condition, originality, and service history.

Classic car values can range from a few thousand pounds to several million. Because of this variation, lenders often assess each vehicle individually rather than applying standard car finance criteria.

Am I Eligible for Classic Car Finance?

Eligibility for classic car finance depends on the lender’s criteria and the type of borrowing used.

Lenders typically assess income, credit history, affordability, and the value of the vehicle. In some cases they may also consider how the vehicle will be stored or maintained.

Before arranging finance, it is important to consider not only the loan repayments but also the ongoing costs of owning a classic car. These may include specialist insurance, maintenance, storage, and restoration work.

If you fail to maintain repayments on a secured loan, your home may be at risk.

Guidance on borrowing and credit risk is available from the Financial Conduct Authority

How GPS Financial Can Help

Classic car finance often requires careful planning, particularly when secured borrowing or higher value vehicles are involved.

At GPS Financial, we help clients understand their options, assess affordability, and structure borrowing that fits their wider financial position. Our focus is on providing clear advice and helping clients make informed financial decisions.

Speak to GPS Financial

If you are considering classic car finance and want practical guidance, speak to the team at GPS Financial.

We will review your circumstances, explain suitable borrowing options, and help you structure finance that supports your plans.

Call 029 2267 7707 or contact us here