When it comes to financing a car, many individuals think of purchasing brand-new or slightly used vehicles. However, what happens if you have your eyes set on a car that is older than 10 years? This article will guide you through the banks and lenders that provide car loans for vehicles over a decade old, and how you can secure financing for such a purchase. Understanding your options and the specific requirements is crucial to making an informed decision.
Introduction to Financing Older Cars
Financing a car older than 10 years is not as straightforward as securing a loan for a newer vehicle. Many banks and traditional lenders hesitate to finance cars that are more than a decade old, as the vehicle’s value is lower and the risks associated with repairs or depreciation are higher. However, there are several financial institutions that specialize in loans for older vehicles, and these can be a viable option if you’re interested in purchasing a car that’s no longer considered new.
Key Considerations for Financing Cars Older Than 10 Years
Before diving into the banks and lenders that offer financing for cars older than 10 years, it’s important to understand some of the key factors that may influence your loan application:
- Vehicle’s Age and Condition
One of the primary factors that banks consider when financing a car older than 10 years is the condition of the vehicle. The older the car, the more it is subject to wear and tear, which can lead to repairs. Lenders may request a vehicle inspection or review the car’s maintenance history before approving the loan. - Loan Term and Interest Rates
Cars over 10 years old typically have a lower resale value, which means the loan term may be shorter, and the interest rates might be higher compared to new vehicles. Lenders often view older cars as higher-risk investments, so expect terms that are less favorable than a standard car loan. - Down Payment
In some cases, a larger down payment may be required to finance an older vehicle. This can help reduce the lender’s risk by ensuring that the loan balance is lower than the car’s depreciated value. - Credit Score
As with any loan application, your credit score plays a major role in securing financing. For loans on older cars, having a higher credit score may increase your chances of getting approved, even if the vehicle is over 10 years old.
Banks and Lenders That Offer Financing for Cars Older Than 10 Years
While traditional banks might be hesitant to offer financing for older vehicles, several financial institutions specialize in offering loans for cars older than 10 years. Let’s explore the options available for you.
1. LightStream by SunTrust Bank
LightStream, a division of SunTrust Bank, is known for offering car loans with competitive interest rates, even for older vehicles. LightStream specifically states that it finances cars that are up to 12 years old, and in some cases, it may even provide funding for vehicles that are 15 years old or more. With a solid credit score, borrowers can access relatively low-interest rates for their loan. However, it is important to note that LightStream offers loans primarily to individuals with good to excellent credit.
2. Capital One
Capital One is another popular lender that can provide financing for cars older than 10 years. While Capital One typically focuses on newer vehicles, they do offer car loans for older vehicles in select circumstances. Capital One allows you to prequalify for a loan without a hard credit inquiry, giving you a good idea of your loan terms before committing. However, the exact terms and conditions for financing an older car will depend on your credit history and the car’s condition.
3. Carvana
Carvana, known for its online car-buying platform, also offers financing for vehicles over 10 years old. They provide an easy online application process, and with their in-house financing options, you may be able to secure a loan for a car older than 10 years without dealing with a traditional bank. Carvana’s financing is more flexible, as they cater to a broader range of borrowers, including those with lower credit scores. However, interest rates may be higher for cars that are older or have higher mileage.
4. Auto Credit Express
Auto Credit Express specializes in providing car loans for people with bad credit, and they also finance older vehicles. This lender works with a network of dealers that offer financing for cars older than 10 years. If you’re having trouble securing financing through traditional banks due to credit score issues or the vehicle’s age, Auto Credit Express can help by connecting you with dealerships willing to work with cars that are more than a decade old. While they cater to people with less-than-ideal credit, you may still face higher interest rates compared to traditional lenders.
5. LendingClub
LendingClub is a peer-to-peer lending platform that offers personal loans, including car loans, for used and older cars. LendingClub works differently from traditional banks by matching borrowers with individual investors who provide funding. While their platform typically lends to individuals looking for loans for used cars, they can also fund loans for cars that are older than 10 years. LendingClub offers competitive rates for borrowers with good credit, but their platform may also work with individuals with lower credit scores, though interest rates can be higher.
6. RoadLoans
RoadLoans, a subsidiary of Santander Consumer USA, is another great option for securing financing for cars older than 10 years. RoadLoans provides online applications, and you can easily see the loan terms available to you. They specialize in financing used and older cars and can approve loans for vehicles that are up to 12 years old. RoadLoans also offers financing to individuals with a wide range of credit scores, but, like many other lenders, the interest rates may be higher for older vehicles.
7. Credit Unions
Many credit unions are more flexible than traditional banks when it comes to financing older vehicles. They often have lower interest rates and more favorable terms for individuals looking to purchase cars over 10 years old. If you’re a member of a credit union, check with them to see what financing options are available for older cars. Credit unions tend to offer more personalized service, and their loan terms may be more favorable depending on your credit history and the car’s condition.
How to Improve Your Chances of Getting Approved
While each lender may have different requirements, there are several steps you can take to increase your chances of securing financing for a car older than 10 years:
- Improve Your Credit Score
Higher credit scores typically translate into better loan terms. Take steps to improve your credit score before applying for a loan to increase your chances of approval. - Provide a Larger Down Payment
A larger down payment can help reduce the lender’s risk and increase the likelihood of loan approval. This is especially important when financing older cars, as they have a lower resale value. - Consider a Co-Signer
If you have a less-than-ideal credit history, consider adding a co-signer with a stronger credit profile to your loan application. - Inspect the Car
Ensure the car is in good condition and has a strong maintenance history. Many lenders may require proof that the vehicle has been well-maintained and is not prone to significant repairs.
Conclusion
Financing a car older than 10 years may be a bit more challenging than financing a new or newer vehicle, but it is certainly possible. Banks and lenders such as LightStream, Capital One, Carvana, and others offer loans for older vehicles, though you may face higher interest rates and shorter loan terms. If you’re looking to finance a car older than 10 years, it’s important to understand the options available to you, and prepare for a potentially higher down payment and interest rates. By improving your credit score and ensuring the car is in good condition, you can increase your chances of securing financing and drive away in your dream car.
