Most of the cars we buy and race or rebuild do not come via a dealership which can make financing their purchase difficult. Fortunately, there are ways to get around this issue.

Borrow for other large purchases to create cash flow

If you cannot secure financing for the vehicle you want to buy, get it for other major purchases. Then, use the money you would have spent on that to buy your project car. For example, use a Hire Purchase (HP) or a Personal Contract Purchase (PCP) to pay for your family or day-to-day car.  Provided you use the right financial company it is possible to get a no-deposit deal. This frees up more cash which can be redirected and used for your project or racing.

Keep up to date with changes in the way car finance works

Educating yourself about the various loan options is worth doing. It can help you to find and qualify for loans that offer a low APR. Even, help you to borrow despite having a bad credit score.

Periodically reapply for financing

The world of vehicle financing is constantly evolving. So just because you have been turned down in the past does not mean that your application would be refused now.

However, do be a bit careful here. You should only apply to companies that state that your application does not impact your credit score. If you do not do this, multiple failed loan applications can pull your score down even further.

Tap into the benefits of loan restructuring and different loan types

Doing your research could help you to spread the cost over more time and reduce your monthly car payment. Often, what you pay per month when you opt for a Personal Contract Purchase (PCP) is usually far lower than it would be if you chose a Hire Purchase (HP) deal instead.

Leasing your family vehicle instead of buying one outright can also reduce your family's monthly car bill. Again, freeing up cash for your project vehicle.

Try motorsport financing

In some countries, there are financial institutions that specialize in motorsport financing. They fully understand what is involved in buying and running a racing car and are far more open-minded than many other financial institutions.

Classic car financing

The same is true of those firms that offer classic car financing. They have a better understanding of the true value of a vehicle, so they often will lend you money when other financing providers have said no.

Usually, the fact that you are likely to be buying from a private seller is also not a problem. If you are going to use this form of financing, it is worth getting pre-approved. This avoids disappointment and sales falling through.

If, however, you are planning to buy from a dealer you will be in a stronger position. In that situation, you can get access to the same types of financing you would if you were buying a car for day-to-day use. Including, in some cases, the option to create a lease agreement. If at the end of the lease agreement, you decide you do not want to pay the balloon payment and take full ownership of the car you can potentially refinance the deal.

You, do however, need to be careful about the limitations set by a lease agreement. In some cases, you will not be allowed to carry out any modifications until you have made the balloon payment and become the full owner of the vehicle.

The above are the main financing options for buying a classic car, racer, or exotic vehicle. Of course, if you are planning to race, sponsorship is another way to get your hands on the cash you need to buy your vehicle.

Lastly, always do your research. The internet is helpful because people are speaking from their own experience. But, bear in mind that they, like us, are not financial advisors, so you must always do your due diligence. It is the only way to be sure that the finance deal is right for you.

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