If you always dreamed of buying a classic car, you're not alone. This guide to buying a classic car will tell you everything you need to know about what to do in order to secure the vintage car you've always wanted!
Why Do People Buy Classic Cars?
#1 You Want a Show Car
If your purchase is driven by a desire to have a show car, a classic car can be something you can truly feel proud of. However, finding a unique car that is in a decent condition at an affordable price isn't always easy. There will often be an extra element of cost involved to help you restore the vehicle so that it's show-worthy. You will also need to consider transportation costs for the vehicle too.
#2 You Want a Classic Car You Can Restore as a Project
For some classic car projects, they start out as a job that might take 3-6 months, but this can quickly escalate into 1-2 years. If you have lots of spare time on your hands, and the money to support a full or partial restoration, then a project like this could be a great idea.
#3 You Want to Look Good
Buying a classic car as a statement piece is something lots of people do. Consider the cost of running a secondary vehicle and the insurance.
#4 It's Something You've Always Wanted to Do
Fulfilling a desire to do something is a great reason to buy a classic car. It may have been a dream you had since you were a child or something you have been saving up for. The truth is, if it's something you have always wanted to do, and you now can, then do it!
#5 You are Buying a Classic Car as an Investment
If you are going to purchase a classic car in pristine condition, it could have good investment potential. But for most, buying a classic car doesn't always work out to be as an attractive investment as it may first appear. With old cars, they carry costs for insurance, maintenance, and storage. These costs could range from hundreds to thousands of dollars annually.
Buying a Classic Car as an Investment CAN Work
Investment strategies for buying classic cars can work out.
If you plan on purchasing an investment-grade vehicle with no intention of driving it. You park it in a temperature-controlled garage and hold out until the demand for the vehicle pushes up the price. This CAN work, but you need to do thorough research.
There are lots of very nice classic cars from the 50s and 60s that have had no rise in their value for many years. For cars that were popular in the 70s to the 90s, right now, they are experiencing a phase of growth in their popularity. This is likely because the children in this era are now approaching middle age. Now that they have extra income, they are spending this on collectible and classic cars.
Where is the Best Place to Buy a Classic Car?
If you have ever gone through the process of buying a used car, then prepare yourself for a completely different car buying experience. One of the biggest factors that people aren't prepared for is the time it takes.
Finding the best place to buy a classic vehicle isn't always easy. However, with sites such as classiccars.com, there are now huge online marketplaces that are exclusively tailored for the classic car community. This site is dedicated to the needs of classic car Sellers and Buyers, and boasts one of the biggest selections of classic cars from around the globe. Other popular sites that are used to buy classic cars online, include:
Using a Classic Car Dealer to Buy a Car
Just like with any normal used car sale, there are good and bad examples of dealers. Most vintage car dealers run a consignment shop. This is where a private Seller will leave their car at the dealer’s lot.
The dealer will advertise and promote the car, and in return for their efforts, they get a portion of the final selling price. There are some dealers who purchase the car directly from the private Seller at a lower price than the trade value in an attempt to flip it for a profit.
Benefits of Buying a Classic Car from a Dealer
There is usually room for negotiation with a classic car dealer. While the dealer will try to get you to raise their price, they will also ask the seller to reduce their expectations. They are highly motivated to get you to buy the car quickly in order to secure the deal. If you're wondering the best price to start your negotiations at, go in 20-25% below the asking price.
A good classic car dealer will usually conduct an inspection before they sell it on. What's more, a dealer who has confidence in the car's condition will not object to any form of in-depth inspection.
Negatives of Buying a Classic Car from a Dealer
You will pay a slightly higher price compared to dealing with a private Seller. The dealer will usually take a commission value of between 10-15%. Negotiations take longer as you are handling these via a third-party.
One of the untold targets of a classic car dealer involves the quick turnaround time for inventory. It can mean that they will often not have an intimate knowledge of the car or its history.
Buying a Classic Car at Auction
It doesn't matter what you buy, an auction is exciting. There is always an outside chance that you could land yourself an amazing deal. However, there is always the risk of paying out good money for something that isn't exactly what it might appear to be.
Benefits of Buying a Classic Car at Auction
Some of the most desirable classic cars are sold at auction. They do a stellar job of getting access to cars that would never otherwise be sent out to a dealer.
You can access bids online or over the phone, and you can easily bid on a car that is located in a different country.
There is always a chance that you can walk away with a really good price. Especially in low or no reserve auctions for classic cars.
Negatives of Buying a Classic Car at Auction
You have a limited option to physically inspect the vehicle before you commit.
Buying a car at auction also means a higher sale price. Both the Seller and the Buyer pay fees. This can add between 10-25% to the final price.
Buying a Classic Car Privately
Compared to buying a car at an auction or from a dealer, it takes more time and more work. However, as payment for your time, you could land a great car at a great price, and not have to worry about the added fees.
For most people, buying a classic car is a once in a lifetime experience. The car buying process might take time, but it’s time well spent. Without a doubt, it’s the best way to buy a classic car if you want to get a good deal and avoid paying commission.
Benefits of Buying a Classic Car Privately
When you buy privately, you deal directly with the current owner of the vehicle. They are the ideal person to tell you about its story, maintenance, and the reason for the sale.
The other obvious benefit of buying a vintage car privately is that you will get a fair price, without having to pay for a middleman. There could still be the opportunity to negotiate a lower price as well.
Negatives of Buying a Classic Car Privately
The biggest disadvantage of buying a classic car privately is the time and effort it can take. Because private Sellers need to pay for each advert they list, they will usually only list a vintage car for sale on a single site. Because of this, your search will need to go far and wide.
You are entering into a major financial transaction with a complete stranger. For any claims that are being made by an owner, it's important to verify these where possible. Always trust your instincts.
In order to alleviate this risk, Escrow.com provides a valuable service that serves to protect both the Buyer and the Seller when they undertake a major transaction.
- Buyer and Seller Agree to Terms - The Buyer or Seller can initiate a vehicle transaction. All parties have an opportunity to agree on the terms of the transaction, including shipping fees and inspection periods.
- Buyer Pays Escrow.com - The Buyer submits a payment by approved payment method to our secure Escrow Account. Once Escrow.com verifies the payment, the Seller is notified that funds have been secured 'In Escrow.'
- Seller Ships the Vehicle to Buyer - Upon payment verification, the Seller is authorized to send the car via the agreed shipping method. The Seller submits the tracking information to Escrow.com who verifies that the Buyer receives the vehicle.
- Buyer Accepts the Vehicle - When the Buyer receives the vehicle, they have a number of days equal to the agreed-upon inspection period to inspect the vehicle. If the vehicle meets the requisite standard, the Buyer informs Escrow.com they have accepted the car.
- Escrow.com Pays the Seller - Escrow.com releases the funds to the Seller from the Escrow Account.
First-Time Classic Car Buyer - Knowing What Type of Car to Buy
Whichever route you choose to buy a classic car; there are a few quick tips here to help you.
If you are a first-time classic car Buyer, then it is usually best to stick with more popular models. Although a lower production classic car might seem tempting; as a first-timer, you need to keep it simple, here's why.
For most major classic cars, you will find a decent choice of classic car clubs. When you buy a mainstream model, you can easily talk to like-minded fellow car owners in a similar position to you.
With rarer models, the availability of cars can be an issue. However, with a more mainstream model, you will be able to find any parts more easily. The parts will also be more reasonably priced.
There will come a day when you want to resell your classic car. When this time comes, it will be much easier to sell a mainstream model with a pre-established marketplace.
Take your time and get advice from experienced collectors. Do your research. The time you invest now will make sure you get the best classic car.
Classic Car Buyer Inspection Checklist
The inspection of a vintage car is crucial. In fact, it's so critical that people use an outside inspector to come along with them to view the vehicle. If you want to do it for yourself, here are a few key things to consider!
You need to make sure the VIN on the tag of the car matches with the title. If there is a mismatch, then the car may have been involved in a serious accident, it could have been stolen or the title could be a forgery.
The second thing to check if you're buying a classic car is that the vehicle is registered to the current Seller. This is important because there are extra fees if you need to research previous ownership records and apply for the title documents yourself.
Always arrange your appointments to see a car during daylight. The exterior will be much easier to view. Look for any misaligned panels, mismatched panels, dents, scratches, or even changing to the coloring of the paintwork.
Classic cars that come with their original interior are always best. Look at the radio, the badges, the upholstery, the seats, and the emblems on the interior of the car. Make a note of what's missing or damaged to help with your negotiations.
If you're buying a classic car, then you should expect a little rust. However, if the rust damage extends to entire sections of floorboards or panels, then you need to exercise caution. If any panels look like they have been replaced or repaired because of rust, this could indicate a more serious issue.
Q: Do you need to look at the underside of a classic car before buying?
A: Yes. Rust is one of the major reasons for this.
If you can, test driving a classic car, this a great opportunity to check for any issues under the hood. Listen carefully for any clunky sounds or squeaks. Does the car feel unsteady when turning corners? If so, this could indicate a wider suspension problem.
As a first-time Buyer, you could overlook things that an experienced classic car enthusiast will know and understand. If anyone says no to you bringing an inspector, then you've probably just missed out on a not-so-great deal! An inspector will also help you keep your feet on the ground.
There are several areas on the car you’ll need to pay close attention to. To help you avoid missing any obvious checks, we’ve created a handy resource for you to print or keep on your phone.
Here is a link to your classic car inspection checklist.
Everything You Need to Know About Classic Car Insurance
Once you decide to buy a classic car, you'll want to protect your investment. Aside from maintenance, you will also need to buy classic car insurance.
What Exactly is Classic Car Insurance?
With vintage car insurance, your car is only covered for a guaranteed value that is agreed upon between you and your insurance company. A classic car will usually increase in value over time. This is more-so if the car is well looked after or if it is restored to a high standard.
What are the Different Types of Classic Car Insurance?
Although most classic car insurance policies are similar, the way insurance companies classify the different types of classic cars is different. Here are the most common categories of classic cars that insurers will use in order to decide if they will offer you cover.
- Antique Auto Insurance - Most insurance companies will classify any car that is at least 25 years old as an antique vehicle. However, in some states, this could be lower, at just 20 years old.
- Classic Car Insurance - Most insurance companies state that a classic car should be anything between 19-24 years old.
- Replicas and Kit Cars - For representation vehicles that are at least 24 years old, with individually manufactured components.
- Modified Car Insurance - This doesn't always constitute a classic car. However, if a classic car has had the majority of its stock equipment replaced or altered, this could be rated as a modified vehicle.
- Additional Considerations - Aside from the core categories, there are other classic cars that might fall into one of these special consideration categories.
- Veteran vehicles that were produced before 1919
- Hot or Street Rods that were produced before 1949
- Rare motorsport vehicles, classic motorcycles, modern limited production models, classic military vehicles, or antique tractors.
How Does Classic Car Insurance Work?
Classic car insurance works much like normal auto insurance. A policy will usually run for a year, and includes coverage for medical payments, collision, liability, and uninsured motorists. There are also a couple of extra options.
- Roadside Coverage - Most classic car policies come with an added option to cover towing with a flatbed. This helps to prevent any unnecessary wear and tear.
- Auto Show Medical Reimbursement - If somebody is injured at an event or exhibition involving your vehicle, this coverage will help pay for medical expenses.
- Traveling Coverage - This is to help reimburse you for any accommodation, a rental vehicle, food, and personal items if your vehicle breaks down.
- Coverage for Spare Parts - If you keep a selection of back-up parts which are destroyed or stolen, this will cover the cost of replacement at an agreed value.
- No Attendance Required - This cover protects your car if you leave it at a car show unattended. The car will not need to be in your exclusive care in order to be protected.
Classic Car Insurance Eligibility
There are all mileage restrictions imposed on policies. These limitations are specific to your state, but most will not allow more than 7500 miles per year. You will be limited to driving the car for leisure or show activities. If you have an accident when travelling to the shops or a place of work; you're probably not going to be covered for this.
Although not every one of these rules will apply, many insurance companies will not offer cover unless:
- You have been driving for a minimum of between 5-10 years
- You are at least 25 years of age
- You will need to park in a safe, secure location that is under cover
- Have no more than a single fault accident within the past 3 years
- You will need to use or own another vehicle as your primary vehicle
- You live in a specific area or state
- You will not engage in any race-related activities
Some insurance companies might refuse to provide cover if the car is in a very poor condition or if it has sustained a lot of damage.
However, insurance for classic cars will be much cheaper than conventional auto insurance. This is because you drive less miles, and usually, it will not be used during peak traffic times.
The Prices of Classic Cars
Some classic cars are sold in immaculate condition. Others are sold as restoration projects in a worse state. It is usually the condition and demand that will dictate the price for a car. Typically, the more you spend upfront, the more you’ll save in the future.
The Best Way to Pay for a Classic Car
Just like buying a used car privately, when you buy a classic car, there are different ways you can pay it. For some, using or carrying cash is too risky. With online services such as PayPal for used car payments; there is little protection in place should the vehicle arrive not as described for automotive purposes.
Using an online Escrow Service to Pay for a Classic Car
A bonded escrow service can reduce fraud for classic car sales transactions. You set the terms of the sale, the inspection period, and even include a clause that allows you to get a full vehicle inspection of your classic car carried out before you accept it. If it doesn’t pass this inspection, there is the option to return the car, and the escrow service will return the money to you in full.
Escrow.com offers additional services such as Title Collection, Swap-a-Lease, and Lienholder payoff to make life even easier for all parties involved. If the car is already clear of debt, our Title Collection is a great option. It means you get the correct legal documents issued and takes the hassle out of the legal ownership transfer process for buying a classic car. Lien Holder Payoff services guarantee there is no outstanding debt on the car, giving you confidence when you buy.
Buying a classic car is something many people dream of doing. If you’re one of the lucky people who are now able to buy a vintage car for yourself, you need to take your time. There are many places you can buy a classic car, and while going to a dealer might be quicker, you will pay a small fortune in fees for the privilege.
Escrow.com can alleviate any risk when buying a classic car privately. You can save money, you can have fun while searching for the perfect vintage vehicle, and you can often find a great deal from a private Seller who is just as passionate about the car as you will be. For a comprehensive review of how to use Escrow.com to buy and sell a classic car, please take a look at this this page.
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