How to Finance an Exotic Car

Whether you’re into cars or not, chances are that you’ve dreamt of one day owning an exotic car. After all, that yellow Ferrari that you have been staring at on your computer desktop would sure look better in your garage, but it’s too bad you can’t afford it. But what if you could? What if you could make affordable payments while driving the car of your dreams? We’re here to tell you that it’s a possibility, however, it will just require a few important factors.

Top-tier credit is a must-have

While it could be possible to finance any car with a decent credit score and a really huge down payment, you’ll be more likely to get financed for an exotic car if your credit is in the top tier. And by “top-tier,” we mean a 740 credit score and above. Anything below that might actually work, but again, you’ll likely have to come up with more than a 10 percent down payment if that’s the case. So, if you’re trying to finance a Lamborghini that costs well over $100,000 then you better come with around $20,000 or more. Unless you have a new Honda Civic to trade-in.

Vanessa Bryant 2001 Lamborghini Murciélago
Vanessa Bryant 2001 Lamborghini Murciélago

Your credit history is important as well

Aside from having really a good credit score, having a good credit history is just as important. That doesn’t necessarily mean that you need to have everything paid off, but it does mean that you’ll need to have financed enough assets in order to show that your credit is worthy enough for a really large loan. According to Ed Bolian from VINWiki, banks want to make sure you have financed something similar, so you’ll need to “work your way up” to financing that $100,000-plus car. For example, lenders might not give a $100,000 loan to someone that’s only financed a $20,000 car since that’s a pretty big jump in payments. And as always, the lenders want to make sure that you have the means to pay the money back.

Select the proper loan term

The next part to consider is the proper loan term that best suits your budget. Most car loans, new and used, have loan terms up to 60, 72, or even 84 months, however, some exotic-car lenders like Woodside credit offer ultra-long loan terms of up to 120 or even 144 months. That’s a really long time to pay off a car, but if you’re planning on keeping that dream car forever, or maybe even selling it halfway through, then those long-term loans can at least yield lower and more manageable monthly payments. Just pick what works best for your budget.

Interest rates are something to consider

Any loan that you take out from a lender will have some interest attached to it, which could be anywhere from one percent to 10 percent. This can vary depending on whether you get financing yourself and directly from the bank (direct lending), or if you have a dealer apply for financing on your behalf (indirect lending). Just be wary that a dealer will sometimes tack on a couple of percentage points to the rate that you get in order to make more money off of you.

In this case, they will get what’s called a “buy rate” from the lender (4%, for example) and then tell you that they got you six percent in order to make money (a reserve) off the added rate. It’s unfair, but it’s the business of selling, so we recommend just asking them for the “buy rate” when you’re handing a dealer your credit application.

White 2008 Audi R8 in a white parking garage
2008 Audi R8 | Audi

How Much Car Can I Afford?

It’s not that much different than financing a regular car

In the end, financing an exotic car is not that much different than financing a normal commuter car, it’s just on a different level. While it might be helpful if you make $100,000/year and have a pristine credit situation, you technically don’t always need it. Especially if you have a large down payment. Before you go rushing out the door for that coveted Audi R8, just remember that the insurance and maintenance costs will be much greater than your beloved Toyota Camry. But if you can afford it, then, by all means, live your dream.