The world of classic car collecting has evolved into a sophisticated financial market, where enthusiasts can now leverage their prized possessions to secure substantial loans. Specialty lenders like Sotheby’s Financial Services (SFS) are transforming the collector car market by offering innovative financing solutions. These services cater to high-net-worth individuals who seek quick access to capital without the cumbersome requirements of traditional banking institutions. This shift underscores the growing recognition of classic cars as a distinct asset class, opening new avenues for collectors and investors alike.

Emerging Financing Solutions for Car Collectors

In recent years, specialty lenders have introduced novel ways for car enthusiasts to finance their acquisitions. One such lender, SFS, offers a unique program that allows collectors to use their existing vehicle collections as collateral for loans. This approach provides a streamlined process with minimal paperwork and faster funding compared to conventional loans. By focusing on the value of the collection rather than personal financial statements, SFS aims to meet the specific needs of this exclusive clientele. The program caters to a select group of about 2,000 individuals in the U.S., who possess the collateral necessary for multimillion-dollar loans.

SFS's lending program is tailored to facilitate rapid access to funds, with loan amounts ranging from $5 million to $250 million at competitive interest rates. The terms are flexible, typically lasting from 12 to 36 months and renewable upon maturity. Clients can borrow up to 50% of the low auction estimate of their collection, and funds can be delivered within 45 days or even sooner. Importantly, most collectors can retain possession of their vehicles during the loan period, provided they adhere to insurance guidelines. This arrangement ensures that collectors can continue enjoying their cars while leveraging their value for financial opportunities.

Sotheby’s Expands its Financial Empire into Classic Cars

Sotheby’s has long been a leader in the art and collectibles market, and its venture into classic car financing marks a significant expansion of its financial services. Since acquiring a stake in RM Auctions in 2015, Sotheby’s has positioned itself as a major player in the collector car market. Through SFS, the company now offers financing across over 70 categories, including fine art, whisky, and jewelry, with classic cars being a notable addition. The collector car market has grown into a multi-billion-dollar industry, with live and online auctions generating substantial revenue.

RM Sotheby’s expertise in car valuation and sales complements SFS’s financial acumen, creating a powerful combination for serving high-end collectors. The program has already seen strong interest, originating $210 million worth of loans in 2024. With an average loan size of around $22 million, SFS anticipates further growth, potentially reaching a loan book of $500 million to $600 million within a few years. The company is also exploring geographical expansion, eyeing markets like the U.K. and Switzerland. As classic cars solidify their status as a legitimate asset class, SFS is poised to capitalize on this emerging market, offering collectors unprecedented financial flexibility and opportunities.