How to get car finance for older cars

How to get car finance for older cars

With the current slowdown in production of new cars cluttering our news feeds it’s no wonder people are looking for older vehicles when it comes to their next car purchase.

Whilst looking for a second-hand bargain seems a great option, there are some risks you should be aware of when it comes to older vehicles and especially if you are planning on using car finance to fund it. Take a look at the below helpful information when it comes to getting car finance for older cars.

How old can a used car be for finance?

Each lender will likely have their own criteria when it comes to the age and mileage of the cars they will finance. How old the car can be will usually depend on the length of the loan you are looking to take out.

For example, here at Go Car Credit if you are looking to take a loan out over 48 months, we would require the vehicle to:

  • Have less than 100,000 miles on it at the start of the agreement
  • Be less than 8 years at the start of the agreement

In terms of how old a car can be for PCP, you would need to check with the PCP finance provider for their exact criteria.

Essentially, in the eyes of a lender the newer and less mileage on the vehicle the better. As a result, a vehicle will hold its value better and is less likely to experience mechanical problems.

How to get car finance for older cars?

The lender will check the mileage of the vehicle and the age via an HPI check. This is to make sure there are no discrepancies in the vehicle’s history.

Mileage and age will have an impact on the vehicle’s value so the lender will get an accurate market value for the vehicle to make sure you are not paying too much.

A lender may have different mileage restrictions on different brands of vehicles. For example, higher-end brands such as BMW, Audi, and Mercedes may be allowed to have slightly higher mileage restrictions as the brands are seen to be of better quality than others.

If you have any questions regarding lending criteria on age and mileage it is best to ask your selected lender directly as each lender may differ.

Can I get finance on a car older than 10 years?

It should not be impossible to find a finance provider that will finance vehicles over 10 years old, but you may be more limited than if you looked at vehicles under 10 years old.

The dealership where you are looking to purchase your next car will work with a range of lenders and they will have product information for each of them so could provide details of who could help.

What you should think about is that if you take out a car loan for 48 months you need to make sure you are happy to have a 14-year-old car at the end of the loan.

Cars that are older than 10 years old may start to experience mechanical issues that are expensive to fix. Could you afford to fix these potential issues as well as pay for your vehicle each month?

Can I get classic car finance?

Yes, there are specialist finance providers who could provide you with finance for your classic car. There are HP and PCP finance options for classic cars. If you have experienced bad credit in the past it may be harder as there will be fewer lenders who would provide finance.

Here at Go Car Credit, we do not offer classic car finance as we do not finance vehicles over 10 years old, but we could help you if you were looking to finance a new car and may have had bad credit in the past.

Old car buying tips

If you are looking to buy a cheap run around that’s old in age then there are a few risks to this type of car buying. With age usually comes high mileage, lots of owners, and extensive wear and tear. But all these will usually reflect the price you pay for the old car. Take a look at the below information on what to look out for.

Risks of buying an old car with low mileage

If the car has low mileage that is a good thing. It means whilst the vehicle is old in age it actually hasn’t been used that much.

Always do your checks to ensure that the mileage is correct and there are no discrepancies.

Ensure the vehicle has been regularly serviced and any work is carried out by professionals.

Is it ok to buy a car without a logbook?

The DVLA recommends against buying a car without a V5 logbook. Without a V5, it is hard to verify whether the vehicle has been stolen, written off, has outstanding finance – or whether the seller is even the legal owner and has the right to sell it to you.

It is not illegal to sell a vehicle without the V5 but it could potentially devalue the car as you do not know its history.

If you are really keen on buying the vehicle you should ask the seller to get a new V5 document from the DVLA.

Other risks you find/know of

Make sure you carry out an HPI check. This will provide details of the vehicle’s history such as previous owners, any outstanding finance, if it has ever been involved in an accident, and other important things to know about the vehicle.

Make sure the seller owns the vehicle, so has the right to sell it to you. Check the documents carefully.

Understand how you are going to fund the car purchase. If the vehicle is over 10 years old you may struggle to use HP or PCP finance. A personal loan may be an option or paying cash out of your savings may be the best option.

Ask the seller what work has been carried out, especially regarding high-cost items such as clutch, engine, and gearbox. If any of these have been replaced recently that could indicate they will be good for a while and may come with some guarantee.