When buying an expensive and potentially depreciating asset, choosing the right method and loan provider is often the defining factor in whether or not financing is the best option. Different exotic car financing companies can have drastically different conditions, interest rates, loan terms and down payment requirements, all of which can make an impact on whether or not the loan makes financial sense. That said, the exotic car market is fairly big and there is a good number of financing companies that almost exclusively deal with exotic cars. Even so, some companies are better than others and even more importantly, financing isn’t necessarily the best choice for everyone. That’s why we will do our best to provide as much information as we can to give you a solid starting point for your exotic car financing research.
The difference between exotic car financing and financing a normal vehicle isn’t that big. When financing an exotic car, the lender owns the vehicle until the buyer makes the final down payment. That makes exotic car financing a secured loan where the subject doubles as the collateral. The only difference is that exotic car financing companies offer a wider range of options to accommodate the higher price tag with flexible loan terms and down payments, although interest rates are higher on average. On the other hand, with traditional loans you own the car right from the start, but loans are much more difficult to get approved for because they are typically unsecured. And then there is leasing in which case the customer is essentially borrowing the vehicle for an extended period of time with the intent of returning the vehicle after the loan term is over. In this case, the buyer cannot resell the vehicle and doesn’t necessarily have the option of buying the car once the term is over.
There are three ways of financing an exotic car, the first is through conventional banks, the second is directly through dealerships, and third is through private party financing companies. While getting a good deal is possible through any of the three, financing companies will likely provide much better terms. The most notable exotic car financing companies include Collector Car Lending, Woodside Credit, Premier Financial Services, LightStream, and J.J. Best Banc & Co. LightStream allows terms up to 84 months, loan amounts up to $100,000, at interest rates between 7.2% and 15.2%. Loan terms are the same at J.J. Best Banc & Co. but with a maximum loan of $2M. And Woodside Credit allows terms of up to 180 months with a maximum loan of $1M. Exotic Car Trader also offers financing through private party lenders with terms of up to 144 months with generous maximum loan amounts. But since financing an exotic car usually requires a lot of individual tailoring, it’s always best to inquire with financing companies directly.
One of the first things a financing company will do is check your credit score which, ideally, should be over 750. But again, there is some flexibility to the minimum credit score as well. Furthermore, most exotic car financing companies will demand a 20% down payment, and the maximum loan amount usually depends on the value of your last car loan. It also depends on the buyers annual income which should be higher than the vehicle’s value. But again, these are all guidelines and a lot of companies will rearrange the terms to accommodate customers who don’t necessarily adhere to set rules. For example, Exotic Car Trader is able to consider financing applicants with previous repossessions, foreclosures and bankruptcies. That’s another reason why getting information from the financing company directly is the only way to know for certain whether or not you are eligible for an exotic car financing deal.
Exotic car financing is extremely popular with supercar owners even if they have the means to buy it outright. The main reason is that by financing a car you keep your savings intact for emergencies or further investments. At the same time, it’s an excellent and cost effective way of getting into a supercar if buying it with cash isn’t an option. Also, you have the option of selling the car before the loan term ends, potentially increasing your profit or minimizing the depreciation depending on the car. The cons include relatively high interest rates compared to average exotic car prices. Moreover, the extra debt will increase your debt to income ratio and restrict your possibilities of taking out additional loans. And lastly, while there is a good number of quality exotic car financing companies out there, there is also a good number of shady ones so going with proven financing companies is your safest bet.
In the end, exotic car financing companies offer a ton of flexibility and much longer loan terms to accommodate the, often astronomical, supercar prices. Even the financing qualifications are subject to negotiation and often exotic car financing companies can even provide specific vehicle advice in terms of profit or depreciation potential. That’s why exotic car financing companies are especially good for those who are buying an exotic car for the first time. And if you are looking to finance an exotic car, consider Exotic Car Trader financing. Exotic Car Trader offers loan terms of up to 144 months, with fast approvals, extreme qualification flexibility, and it even handles all the paperwork. On the other hand, if you are looking to buy a car without financing services, Exotic Car Trader includes escrow protection, delivery and first inspection. The same goes if you are looking to sell a car with Exotic Car Trader.
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