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:

• Buying a Car: Why Insurance Might Cost More if You Finance
• Car Finance 101: Everything You Need to Know
• Destination Charges and Dealer Fees Explained

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.