How to finance a car that's old and supposedly worthless?

Crazy D

Resident Madcap
Joined
May 26, 2001
Most of us know how it works. You go into the bank and tell them the year and model of the car you want. They look into Nada or whatever price book they choose and say that's the max they'll give you. Then they look at their interest chart and see how badly they're going to jack you depending on how old the car is. And God help you if the car's older than 6 years, because even if they do loan it to you, they'll want it all back in 2 years.

I was lucky enough to need only a few grand to buy my Grand National. I've heard of many people getting hosed out of the car they want because banks won't loan over 4-6k for these cars.
Knowing my luck, I'll get screwed by this when I try to sell it to some poor schmoe.

But in my daydreaming, I've considered buying a car that's 20 years old and sells for 20k-32k. I'm gonna have like, 11k at most. The NADA book will say this car is worth 1800, max. How would I get the rest? Will my credit union give me some kind of "general loan" for a comparable rate? I have a mortgage, but only for a year, so I doubt I can get a home equity loan.

Tips?
 
Home Equity?

The recent lower interest rates were driving some pretty crazy increases in property values around here. We went from $145k appraised 15 months ago to sold at $160k a month ago. You might be surprised and have 5-10%+ appreciation in the year that you have lived there.

Check it out... tax deductible too!

Joel
 
How bout People First? I bought my 96 dually through them and got 3.9% interest. The only catches are whatever you buy has to be over $7500 and if you buy it off a individual rather than a dealer the interest will be slightly higher (4.9% in my case when I asked).

Banks/credit unions here dont wanna even talk to you if the vehicle is older than 5yrs. They will do a personal loan alright but at ~12-15% interest.. Uh, no thanks.
 
I don't like a bank having the title on my car, so I didn't go for a car loan when I bought my TTA. I cheated and got a 3.75% SECURED personal loan. Unsecured rate is something ghastly like 12-13%.

Granted I could have raided my stock portfolio and paid cash but it's already in the tank and if I pulled the money out now there would be no hope of it recovering. Besides, 3.75% is about as close to paying cash as you can get IMO.

Not everyone can swing a secured personal loan, but if you can, IMO it's the way to go.

Troy
 
Try www.peoplefirst.com which is now Capital One Auto Finance.
I've been through 4 vehicles with them now and have been happy. Especially with the good interest rate and terms. If you have good credit, I'm sure you'll be happy with them.

Oh yeah, I have tried JJ Best as well. They gave me a crappy 11% interest rate on my Typhoon with perfect credit. I got 5.7% with peoplefirst on my latest GN.
 
Maybe its not an American thing, but in Canada its common to have a line of credit secured against a house. If you own a home a line of credit for $100000 is a normal thing at consumer prime interest rates. Your mortgage lender can usually provide this service. My bank will give me an enormous line of credit if I wanted it. The nice thing is I can write a cheque and buy whatever I need whenever I need.

Crazy D - a secured loan means you have offered up something valuable to the Bank that they could take from you if you defaulted on the loan.
 
Top