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Can I use a signature loan to buy a car?
I want to buy an older car, but my bank says it doesn't qualify as a classic car. Can I use a signature loan to buy the vehicle instead?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If you want to buy an older vehicle and you’re constantly denied a traditional
car loan
, a signature loan (also known as a personal loan) is a possible alternative. Generally speaking, lenders won’t lend you money for a car that’s 10-years-old or older or has more than 100,000 miles unless it meets the lender’s qualifications for a
classic car
.If it’s not a classic car, you can use a signature loan to buy the vehicle, but you will pay lots more in interest, simply because a signature loan doesn’t use anything other than your signature as collateral. Therefore, paying the loan off early or more quickly is advantageous to save money.
Getting a signature loan for a car gives you a unique advantage: you have control over your car insurance. With traditional car loans, you are required to carry full coverage, but a signature loan does not have this same requirement.
Even if you don’t want full coverage, it’s still worth shopping around for lower rates on car insurance using the
Jerry
app. Jerry compares personalized rates with more than 50 top providers and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!View full answer
- Gregory R.
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