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How Do You Finance a Car That’s More Than 10 Years Old?

Good day, and welcome to Ask Doug, where we give you answers to your questions. Or, at least, that’s how it’s supposed to work. Usually, I giggle when I’m trying to come up with a fake name for the question asker.

This letter comes from a reader I’ve named Reginald.

Doug,

Great work! Many ‘reputable’ financial institutions will not finance car loans for vehicles older than 10 years. How do you finance a used car purchase for a vehicle that is greater than 10 years old?

P.S.: Am I a complete idiot if I want to buy a B6 S4 Avant? It’s either that or a 540iT or a Volvo 70R.

Thanks,

Reginald

Look at Reginald trying to bait me there, in the first sentence, by opening his letter with “Great work!” You know, Reginald, I do not need your praise to feature your letter. I already get enough praise from my mother, who tells me that I’m pretty good at this whole writing thing.

Anyway, Reginald is surely asking his question because I’m fairly vocal about financing cars instead of paying with cash when the circumstances are right. More importantly, I’ve financed virtually all of my recent cars, including a 2004 Ferrari 360 Modena, a 1995 Hummer, a 2007 Aston Martin V8 Vantage, and, most recently, my 1997 Dodge Viper GTS. By the standards of a normal financial institution, none of these vehicles should qualify for financing.

I know this because I financed my Ferrari 360. When I did, I called up the good people over at Bank of America, my bank. I asked them if I could finance the car. They laughed for approximately eleven minutes, which eventually turned into heavy coughing because they were laughing so hard, and then they told me … no. Not at all.

Interestingly, the Ferrari only lost about 8 percent of its value in the year I had it. The Hummer only lost about 9 percent, and even the Aston Martin — which I drove as many miles as I possibly could’ve — only lost about 20 percent of its value. So these cars would actually be better investments for Bank of America than, say, a new S-Class, which loses something like $227,534 in overall value the moment you drive it off the dealership lot.

But Bank of America would have none of it.

So I called up a friend who sells exotic cars, and I asked him what companies people use to finance older vehicles. He gave me several suggestions, but his top choice was Pentagon Federal Credit Union. Although this is a military credit union, you don’t have to be a member of the military to join — so I joined up, and I discovered car financing heaven. It turns out they finance any vehicle, regardless of age, with up to 120,000 miles.

So I put in my application, and they financed my Ferrari, and they financed my Hummer, and they financed my Aston Martin, and they financed my Dodge Viper. And they never gave me an interest rate over 3 percent.

Not that I think Pentagon Federal is especially unique, Reginald. Once you get past the “usual” financial institutions — all the big banks — I think you’ll find that many local and specialty credit unions will finance older and “exotic” vehicles because they don’t have giant, one-size-fits-all policies that fly in the face of logic. So if it wasn’t PenFed, I think it would be Someone Else Credit Union, and if it wasn’t Someone Else Credit Union, I think it would be This That and The Other Credit Union. Well, you get my drift.

More importantly, I suspect the article’s comments will be filled with alternative suggestions, other credit unions, and various financing ideas. As for your station wagon ideas, well, all I can say is, good luck, have fun, and do not, under any circumstances, purchase a B6 Audi S4 Avant, unless you want to write to me in a year asking if anyone finances engine replacements.

Related Car Finance Stories:

Doug DeMuro is an automotive journalist who has written for many online and magazine publications. He once owned a Nissan Cube and a Ferrari 360 Modena. At the same time.

Editor’s Note: This article has been updated for accuracy since it was originally published. Autotrader’s Renee Valdes contributed to this report.

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33 COMMENTS

  1. I know this old but USAA will

    finance any car with book value. Also, car loans one of USAA services that is open to all as opposed to some like insurance which is closed and offered to military & there families. I have had usaa insurance since I turned 16 (being daughter of a veteran) for 30 years ago and they are an amazing company with all things that have come over the years with car insurance or house insurance – customer service and response is unparalleled and it’s kind of remarkable compared to other banks and large companies in general. Anyway, they offer certain banking services including credit cards and auto loans to everyone.  
  2. I joined Pentagon Credit Union based on your suggestion, only to find out that they would NOT finance my 2005 Carrera.  Maybe the “used to” do this?

  3. Just came across this the other day when looking for a way to finance a 1995 H1 (coincidence).  It’s been converted to the 6.6 Duramax and had many many other upgrades.  Needless to say, I’m paying a lot over book value, it’s significantly older than 10 years, and I’m self employed (always a challenge).  I have an excellent credit score (about 840), good assets, good income, and little debt.  I tried my bank, Wells Fargo (lol), State Farm Bank which I’ve used in the past, and looked at others.  No dice.  I went ahead and tried out PenFed after finding this article.  Process wasn’t bad at all, but the requirements involved income verification through tax returns for the past 2 years, which is tough for anyone who’s self employed and putting a lot of income back into their business and always trying to reduce their tax liability, a vehicle appraisal being as it was higher than book value (which I felt they also put pretty low), and obviously a credit check (which I always love).  While lining up those hoops, I read through the comments below and decided to try out Lightstream as well (what could it hurt).  That’s where it is!! Lightstream is how it should be done if you’re self employed.  The process is simple.  They just look at what you’ve accomplished and make a determination off what they see.  They’re requirements looked at the credit score (good for me), assets (house equity, cash in bank accounts, retirement funds, lack of credit card debt, etc), and simply only asked for a general income amount but seemed to understand that business owners may purchase a warehouse and new company vehicles in a year that they don’t need the cash income and not have a large tax return.  They didn’t seem to care at all what kind of vehicle I was buying.  I guess they figured that not only was I smart and trustworthy enough to pay back the loan, they also figured that a person who seems to have it together would also be smart about their purchase.  That all being said, had I completed the process with PenFed and been approved, my interest rate would have been 0.59% lower.  So, in conclusion, to hell with big banks when it comes to vehicle loans, PenFed is a winner if your paper income is good for the past couple years and the vehicle you’re getting isn’t too crazy, and LightStream is great if you’re in the boat (pun on the H1) I’m in.  

    Thank you Doug for your videos and helpful info.  Saved me here!  Hope this helps others!
  4. I used Lightstream to finance my Humvee.  It’s a secured loan, but they didn’t even care what kind of vehicle I was buying.  4% interest with a credit score of 730.

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Doug Demuro
Doug DeMuro writes articles and makes videos, mainly about cars. Doug was born in Denver, Colorado, and received an economics degree from Emory University in Atlanta. After graduation, Doug spent three years working for Porsche Cars North America. Eventually, he quit his job to become a writer, largely because it meant that he no longer had to wear pants. Doug’s work has been featured in a multitude of magazine publications and websites, including here at Autotrader — where he launched the Oversteer enthusiast blog — along with Jalopnik, GQ, and The Week. His YouTube channel has hundreds of published videos and has racked up hundreds of millions of views. Today, Doug lives in San Diego, California, with his 1997 Land Rover Defender 90 NAS, 2005 Ford GT, and 2012 Mercedes-Benz E63 AMG Wagon.

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