Classic Car Finance: Funding Your Piece of Motoring History

Why This Guide Matters

Let’s be honest: the idea of owning a classic car is up there with winning the lottery, or discovering your favourite pub now does Sunday roasts. But unless you’ve got a vault stuffed with gold bullion (and if you do, why are you reading finance guides?), you’ll need to think about how to fund that piece of motoring history. Classic car finance isn’t as simple as nipping to the shops for a pint of milk. Get it right, and you can be wafting around Goodwood like a minor aristocrat. Get it wrong, and you’ll be left polishing someone else’s bonnet at shows. Let’s break down how you can swap your dreams for keys, without selling your last kidney.

The Basics Explained

First, what counts as a ‘classic car’? In the UK, if it’s over 40 years old and still running, it’s a classic. But for finance purposes, lenders are more interested in whether it’s rare, collectible, and likely to make your neighbours jealous. Financing a classic is nothing like buying the latest hatchback. The main options are:

• Hire Purchase (HP): Pay a deposit, then fixed monthly payments. You own the car after the last payment. Simple, like brewing a cuppa.
• Personal Contract Purchase (PCP): Lower monthly payments, but there’s a big payment at the end if you want to keep the car. Like dating before you marry.
• Personal Loans: Borrow a lump sum from a lender, buy the car outright, and then pay back the loan. Your classic is yours from day one—along with the responsibility.

Each comes with its own quirks, and classic cars add a whole layer of complexity—think more ‘Inspector Morse’ than ‘Fast & Furious’.

How It Affects You

Here’s the kicker: classic car finance isn’t just about getting approved, it’s about how it fits your life. For starters, lenders are fussier than a cat at dinner. They’ll want proof it’s worth what you’re paying, that it’s not been welded together from old biscuit tins, and that you don’t plan to use it as a daily runabout. Insurance is trickier too. Classic car policies can be cheap, but only if you treat the car like royalty (low mileage, garaged, and no racing up the M1).

Monthly payments might be higher than for a new car, but depreciation is your friend. Unlike the latest SUVs that lose value faster than a knocked-off watch, classics can actually appreciate if you pick wisely. But don’t bet the farm—values can drop if fashions change or someone discovers another barn find.

And remember, maintenance. Parts for a 1960s Jag don’t grow on trees. Budget for repairs, or learn to love oily weekends.

Our Approach

At Kandoo, we’re not just here to shuffle paperwork and nod sagely. We’re your pit crew, guiding you through the maze and making sure you don’t end up with a lemon. Here’s how we do it:

1. We understand classic cars. Not just the numbers, but the quirks, the values, and the oddball things that make them special. We know the difference between an E-Type and an Escort (and why both are worth loving). 2. We shop around. As a broker, we’ve got access to lenders who ‘get’ classic cars—and those who don’t. We match you with the ones who actually want to fund your dream, not just tick boxes. 3. Tailored advice. Whether you’re eyeing a concours-standard Rolls or a barn-find Beetle, we’ll help you weigh up your options. Big balloon payment? Smaller monthly hit? We’ll explain the pros and cons in plain English. 4. Transparency. No hidden fees, no jargon. If something sounds too good to be true, we’ll tell you. 5. Ongoing support. Buying a classic is a journey, not a transaction. We’re here for the long haul—whether you want to refinance, upgrade, or just brag about your new wheels.

Our goal? To get you grinning behind the wheel, not grinding your teeth over the paperwork.

Before You Decide

Pause for a moment. Before you sign on the dotted line, ask yourself:
• Can I afford the running costs? Classic cars need TLC and sometimes, a second mortgage for parts.
• How will I use it? Sunday drives, shows, or hidden in a garage as an investment?
• What’s the resale market like? Some cars are easy to shift, others less so.
• Is it insured properly? Agreed value cover is a must.
• Is the finance deal flexible? Early repayment, overpayments, balloon options—know your exit routes.

Dig deeper than the glossy paintwork. Read the small print. Speak to specialists (that’s us), and don’t let your heart run away with your wallet.

What’s Real, What’s Hype

There’s plenty of talk about classic cars being ‘better than money in the bank’. Sometimes, yes—if you bought a Ferrari 250 GTO in the 80s, you’d be laughing now. But most classics aren’t investment unicorns. Prices can wobble, and maintenance costs can eat into profits faster than a hungry Labrador. Buy because you love the car, not just the spreadsheet.

The hype: "Classics only go up in value." The reality: Some do, some don’t, and some rust quietly in sheds for decades. Know what you’re getting—and why you want it.

Pros & Cons

Here’s the good, the bad, and the oily:

Pros:

• Potential to appreciate in value
• Stand out from the crowd
• Cheaper insurance (sometimes)
• Pure driving joy (no touchscreens in sight)
• Tax and MOT exemptions (for very old cars)

Cons:

• Higher repair and maintenance bills
• Finance can be trickier to arrange
• Not as practical for daily use
• Risk of depreciation if market shifts
• May need specialist storage or insurance

Other Options to Consider

If classic car finance sounds a bit like juggling flaming spanners, there are alternatives:
• Leasing: Rare, but possible through some specialist firms. Usually for high-end classics—think Aston Martins, not Austin Allegros.
• Equity Release: If you’ve got another valuable asset (like a modern car or property), you could leverage that instead.
• Credit Unions: Sometimes more flexible than banks, especially if you’re a long-standing member.
• Peer-to-Peer Lending: Riskier, but sometimes quicker and less stuffy than traditional banks.
• Savings: Old-fashioned, but it works. If you can wait, save up—no interest, no debt, just pure ownership.

Compare the options. Sometimes, the best move is to wait and pounce when the right car comes along.

FAQs

Q: Do all finance companies fund classic cars? A: Not a chance. Some only want to deal with new stuff that depreciates like a dropped brick. We work with lenders who ‘get’ classics.

Q: What qualifies as a classic? A: Usually 20+ years old, collectible, and with some value. It’s not just age—it’s desirability and condition.

Q: Can I use PCP for a classic? A: Sometimes, but it’s less common. HP and personal loans are more popular. We’ll help you find the right fit.

Q: What about insurance? A: Specialist classic car insurance is a must. You’ll need agreed value cover, limited mileage, and proof you’re not planning to commute from John o’ Groats to Lands End every week.

Q: What if my classic breaks down? A: Welcome to the club. Budget for repairs, join a classic car club, and make friends with a good mechanic.

Q: Can I finance a restoration project? A: Sometimes, but lenders prefer cars that can actually move under their own power. Partial restorations are riskier, but possible with the right lender.

Q: What’s the process with Kandoo? A: Simple. Tell us what you want, we’ll talk you through the options, and if you’re happy, we’ll sort the finance. No faff, no nonsense.

Next Steps / Call to Action

Ready to roll back the years and get behind the wheel of your dream classic? Don’t let finance be the thing that stalls you at the start line. Talk to Kandoo—your pit crew for classic car finance. Click below, or give us a ring for a no-obligation chat. Your slice of motoring history is closer than you think.