Ways to fund a supercar

The allure and mystique of the most prestigious marques are undisputed.

However, finding ways to fund that supercar purchase may need a little thought and some specialist advice.

Some background

Let’s assume that, for whatever reasons, you do not wish to consider purchasing a vehicle outright using your own capital reserves.

In that scenario, which is the most commonplace one, you’re going to need some form of assistance from a provider of super car finance.

At the risk of generalising, many standard car finance providers may balk at the prospect of funding a Bugatti, Lamborghini, Porsche or Aston Martin etc.  The most likely reason for that would be the sums involved in a single vehicle and their perception of the risks associated with lending of that magnitude.

So, at the outset, it will perhaps be necessary to presume that you are going to need to find a specialist.  Typically, such specialists fall into one of two categories:

• the genuine specialist independent provider of super car finance;

• a dealership offering the type of vehicle you are looking for.

Theoretically, you may be able to approach a bank for a standard vehicle acquisition loan but in today’s tighter bank lending environment, you may find that it is difficult to source a bank loan for what is clearly such a luxury item.

Dealership finance

There isn’t any reason why you should not objectively consider this option.  Many dealers specialising in vehicles of this type will have developed their own funding sources in recognition of the fact that it is such a highly specialised marketplace.

There may though be an understandable slight reluctance for some purchasers to mix the business of negotiating a deal for the purchase of the vehicle with looking for finance.  It may be debatable but for some, such mixing might be a case of reducing the scope for driving a hard bargain.

True, some of the very rarest and particularly classic supercars may be in such demand that there is little scope for price negotiation but that is far from the case with every vehicle in this category.

So, if you wish to keep your negotiating position entirely uncluttered by other issues, you may wish to consider independent super car finance providers.

Finding super car finance

There are specialist providers in this category.  In many respects, your application position may not be any different to someone purchasing a standard family saloon. 

For example:

• you will need to provide some form of objective evidence which indicates you will be capable of meeting the repayments over time.  This is most commonly in the form of proof of income but in some cases, your savings and other financial wealth indicators might be acceptable where your income is unpredictable;

• typically, you will be asked to find some form of financial contribution towards the purchase or other form of acquisition of the vehicle;

• the price you are looking to pay for the car must make sense against a realistic market valuation provided by a recognised independent source.  In the case of extremely rare performance or prestige vehicles, that may be trickier but most lenders will seek to ensure that they are not financially exposed by having a debt on a vehicle greater than its realistic worth;

• if the funding is approved, you will typically need to show evidence that the vehicle is fully insured before the acquisition is concluded.

There may be some minor variations on some of these points, depending upon the exact finance mechanism you select.

Types of finance

Where supercars are concerned, most specialist providers will have a range of different options available.  They might include:

• leasing options that, at the end of the term, result in a vehicle being returned to the funding provider;

• certain leasing options that are purchase-oriented which will result in the vehicle eventually becoming your property perhaps through the payment of a final sum at the end of the initial term;

• hire purchase arrangements – which would typically operate in the same fashion as any other form of HP agreement;

• secured lending – it may be possible to find a relatively standard loan that you will repay over time but typically a charge will be required over the vehicle and in some cases, due to the large sums and risks involved for the lenders, additional forms of security may be required.

Your credit history

Given the sums involved, it is only to be expected that people providing super car finance will inevitably pay particularly close attention to your credit history scoring.

Some forms of minor problems or even more significant issues in the past are unlikely to be showstoppers.  Even if such problems are more recent, it may still be possible to secure finance – although the assistance of a specialist intermediary might be required.

Special requirements

The funds provider may require you to meet certain conditions relating to things such as where and how the vehicle is used, maximum mileages, where it is parked when not in use and the security systems that must be fitted to it.

There may be a relationship here between their requirements and those of your provider of supercar insurance.

Do remember that if you are operating some form of hire or lease purchase agreement, typically the vehicle will not be your full legal property until you have completed all the agreed repayments against it.  As such, it would be illegal for you to sell or to otherwise dispose of the car unless you had the finance provider’s written agreement in advance.

Standard versus customised vehicles

Although there is hardly any such thing as a standard supercar, nevertheless, there will typically be a manufacturer’s specification for the vehicle.

Both in terms of your insurance and finance commitments, you should not significantly customise or otherwise modify the vehicle without getting the prior agreement of both parties.

In cases where the vehicle is already highly customised or it is a bespoke build at the time of purchase, it may require a little more effort to find finance, as some lenders may become more reluctant when the vehicle cannot easily be placed within a standard market specification.

Once again, if you are considering such a vehicle, you may need professional assistance in terms of finding your super car finance.