Excuse my ignorance... Loans for cars prior to 2000

[euroshark]

I've been looking around at some pretty sweet mid to later 90's bimmers lately, and everywhere I attempt to apply for a loan says they don't do loans on cars that old.

Should I be looking at a personal / signature loan? I've always bought cars with cash, and I like it that way, but I'm curious...

[NOMAD]

I've been wondering the same thing.
typically if it's that old of a car they are not looking at being able to claim it as collateral or repo it.

I'd think a personal loan or some sort of home equity loan would be the only way.

Not sure though

[euroshark]

Do you mean that old of a car?

I'm not talking about a $2000 loan, just cars that are older than the year 2000... Like say, $8000 for a 1995 540i 6 speed.

I just used ebay's financing center and found something that may work.

[nando]

you'd have to go through a credit union most likely. banks don't typically give loans on cars more than 10 years old.

[M42Technik]

Oddly, my bank will let me take out a loan on any car of any year. I know this when I went it to see about taking a loan out on and E30 M3, and they said they do any and all years...

[cramer]

you'd have to go through a credit union most likely. banks don't typically give loans on cars more than 10 years old.

Yup, credit union is the way to go (better rates too ;))

[Ben Carufel]

My credit union is great this way. They'll loan up to the highest Kelley Blue Book value on any car, any year. Their rates are currently at 5.99%, too, if I recall correctly...not bad at all.

[UNHCLL]

Lame-o.
Don't buy an old car on credit.

[TwoJ's]

Don't buy an old car on credit.

[Ben Carufel]

Lame-o.
Don't buy an old car on credit.

Say you've got $10k in an account making 10.5% interest.

Let's say you are buying a $10k car and the bank will loan you the money at 6% interest.

If you pay cash, you no longer have $10K making 10.5% interest. If you take the loan, you are now making 4.5% interest by using the bank's money to your advantage.

Rich people don't work for their money, they make their money work for them.

[browntown]

making 10.5% interest? Do tell. I know of very few stable investments that can return that high.

[Ben Carufel]

making 10.5% interest? Do tell. I know of very few stable investments that can return that high.

Go look up the average for Dodge & Cox's International Fund. DODFX is the ticker.

I'll put them here for you, but you can go check Yahoo Finance if you want to verify:

YTD 2007: 12.44%
2006: 28.01%
2005: 16.75%
2004: 32.46%
2003: 49.42%

I only mention DODFX because it's one of my favorite funds and I think everyone should own a bit of it.

[WlknGenius]

Say you've got $10k in an account making 10.5% interest.

Let's say you are buying a $10k car and the bank will loan you the money at 6% interest.

If you pay cash, you no longer have $10K making 10.5% interest. If you take the loan, you are now making 4.5% interest by using the bank's money to your advantage.

Rich people don't work for their money, they make their money work for them.

That sounds more like rationalization than logic. Getting 10.5% interest from the bank is better than 4.5%.

The only way I see a loan being good is if the interest rate is lower than inflation, in which case you are getting a discount on the car by taking out a loan.

[fretburnr]

nice returns there Ben - good tip.

I'm actually looking into this same thing right now - but my bank also sets a 7 year old limit. What should I look for in a credit union? I'd also be only financing half the value of a car, so no upside-downies for me.

[808BMW]

My credit union will do older cars, but have a different rate based on cars over 3 years old.
My 4runner is @ 7.5%.