Buying a classic car is different from financing a standard road vehicle. Most lenders treat classics as specialty assets, which means the loan structure, deposit requirements, and approval process don't follow the same pattern as a typical car loan.
The main challenge is that classic cars are valued on condition and provenance rather than a published guide price. A lender can't pull up a 1967 Ford Falcon on a standard valuation platform the way they would a three-year-old Toyota. That means you'll need a professional valuation upfront, and not every lender will accept classic vehicles as security.
How lenders assess classic car finance applications
Lenders want to see that the vehicle has a clear valuation, is insurable, and holds resale value if they need to recover the loan. A professional valuation from a recognised appraiser is usually required before approval. The appraiser will consider originality, restoration quality, service history, and market demand for that particular make and model.
Consider a farmer near Northam looking to purchase a restored 1970s Holden ute. The seller is asking $45,000, but without a formal valuation, most lenders won't proceed. Once the buyer arranges an independent appraisal confirming the vehicle's condition and market value, the lender can assess the application. In this case, a secured loan with a 30% deposit and a five-year term was approved, with the ute held as security. The monthly repayment sat within the borrower's budget, and the loan amount reflected the appraised value rather than the asking price.
You'll also need comprehensive insurance that covers agreed value, not market value. Lenders won't approve a classic car loan without proof that the vehicle is insured for the full loan amount. If you're planning to use the car on a working property, make sure the insurer understands how the vehicle will be stored and used.
Deposit and loan structure for classic vehicles
Most lenders require a deposit of 20% to 30% for a classic car. Some may go higher depending on the age of the vehicle, its condition, and whether it's been modified. A larger deposit reduces the lender's risk and improves your borrowing capacity.
Loan terms for classics are typically shorter than new car finance. Where a new vehicle might be financed over seven years, a classic is more likely to be approved for three to five years. Lenders want the loan repaid while the vehicle still holds value, and classic car markets can be less predictable than the general used car market.
A balloon payment can help reduce the monthly repayment, but it's less common with classic car finance. If you're buying the vehicle as a long-term asset rather than something you plan to sell in a few years, a standard principal-and-interest loan is usually the better option. If you already have a loan on another vehicle or asset and want to consolidate, a car loan refinance might be worth exploring, though it depends on your current loan terms and the equity in your existing assets.
What documentation you'll need
Beyond the standard income verification and credit checks, you'll need a professional valuation report, proof of insurance, and details of the vehicle's history. If the car has been restored, receipts for major work can support the valuation. If it's been imported, you'll need compliance documents and proof of ownership transfer.
In regional Western Australia, access to certified appraisers can be limited. If you're based in the Wheatbelt or further north, you may need to arrange for an appraiser to travel or transport the vehicle to Perth for inspection. Factor that cost into your budget before you commit to the purchase.
Some lenders will also want to know how the vehicle will be used. If it's purely recreational and will be stored securely, that's straightforward. If you're planning to use it occasionally on the farm or for local events, make sure the insurer and lender are both aware.
How this differs from standard vehicle finance
A standard vehicle finance application for a farm ute or sedan relies on a published redbook value and a predictable depreciation curve. Classic cars don't depreciate in the same way. Some appreciate, some hold steady, and others lose value if the market shifts or the vehicle isn't maintained.
That uncertainty means lenders are more conservative. They'll lend a smaller percentage of the vehicle's value, require more documentation, and may charge a slightly higher interest rate than they would for a new or late-model used car. The loan amount is also tied to the valuation, not the purchase price, so if the seller's asking price is above market value, you'll need to cover the difference with your deposit.
Classic car loans are almost always secured. The vehicle itself is the security, which means if repayments aren't met, the lender can repossess and sell the car. Make sure the monthly repayment fits comfortably within your cashflow, especially if your farm income fluctuates seasonally.
Choosing the right loan structure for your situation
If you're buying a classic car as a hobby or investment, a personal loan might seem like an option, but the interest rate is usually higher and the loan isn't structured around the vehicle as security. A secured car loan tied to the vehicle gives you access to lower rates and a longer repayment period if needed.
If the vehicle will be used in connection with your farming business, even occasionally, talk to your broker about whether a business vehicle loan is more appropriate. The tax treatment and loan structure can differ, and it's worth understanding which option suits your circumstances before you apply.
For farmers managing multiple equipment or stock purchases, timing matters. If you're also looking at farm equipment loans or other working capital, consider how a classic car loan fits into your overall borrowing capacity. Lenders assess your total debt position, not just the individual loan, so if you're planning a machinery purchase in the next six months, it may be worth sequencing your applications.
Call one of our team or book an appointment at a time that works for you. We'll help you work through the valuation process, find a lender who understands classic vehicles, and structure the loan so it fits your budget and your plans for the car.
Frequently Asked Questions
Do I need a professional valuation to finance a classic car?
Yes, most lenders require a professional valuation from a recognised appraiser before approving a classic car loan. The valuation confirms the vehicle's condition, originality, and market value, which the lender uses to determine the loan amount.
What deposit is required for a classic car loan?
Most lenders require a deposit of 20% to 30% for a classic car, though this can be higher depending on the vehicle's age, condition, and modifications. A larger deposit reduces the lender's risk and can improve your chances of approval.
Can I use a balloon payment on a classic car loan?
Balloon payments are less common with classic car finance, but they can be arranged to reduce monthly repayments. If you plan to keep the vehicle long-term, a standard principal-and-interest loan is usually more suitable.
How do classic car loans differ from standard vehicle finance?
Classic car loans require a professional valuation instead of a published guide price, typically have shorter loan terms, and often require a larger deposit. Lenders are more conservative because classic cars don't follow predictable depreciation patterns.
What insurance do I need for a classic car loan?
You'll need comprehensive insurance with agreed value coverage that matches the loan amount. Lenders won't approve a classic car loan without proof of insurance, and the policy must reflect how and where the vehicle will be used and stored.
