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Black book auto value4/11/2023 ![]() ![]() A Little Math Goes a Long Wayĭetermining a car’s value can help you calculate your LTV to see if you’ll qualify for an auto loan or an auto loan refinance. While a car may be in good condition, high mileage or old age may reduce its value compared to a car that’s in good condition, has lower mileage or is newer. Additional features or packages (like a sound system, heated seats, luxury or sports model, etc.).Not every car can check off the “excellent condition” box. Defining your car’s condition can be a tricky thing to do, but it’s best to be realistic. Most value guide websites will ask you to describe a car’s condition to receive a value estimate. Note the car’s conditionĪ car’s condition (fair, good or excellent) can impact LTV and loan approval. If you’re not purchasing a car through a dealership, the private seller’s car price (or private party value) may be taken into account when calculating LTV. You should also ask the lender which car value they will use to calculate the LTV – trade-in value, book value, loan value or retail value – to know which numbers to use in your calculations. Ask your lender which guides they prefer so you can get a better idea of what value they’ll be using in their LTV calculations. It’s good to visit each website because the car’s value may differ slightly between them. Use value guides like Kelley Blue Book, NADA, Black Book or Edmunds to get an accurate estimate of the car’s value. ![]() Figuring out your car’s value will give you a better idea of your LTV when it comes time to get a loan or refinance. There are a few easy ways to determine your used vehicle value. If you wait too long to refinance, your car may lose too much value compared to what you still owe on your loan, and you may not qualify for refinancing. Your LTV may be higher than when you bought the car if you owe more on your loan than the current car valuation. If time has passed since you got your original loan, your car has likely lost some of its value. And LTV will play a key role in what a lender offers you. Waiting for the right time to refinance your auto loan is crucial to getting the best deal. This can cause you to go upside down on your loan if the value of your car experiences depreciation faster than you can pay off your loan.Įmail Facebook LinkedIn Reddit Twitter Loan-to-value and refinancing an auto loan Negative equity: An LTV of 100% or more (meaning you’re borrowing the same amount or more than what the car is worth) means you have negative equity in your car.A low LTV won’t always translate into lower interest rates if you have bad credit scores. But remember, factors like your income and credit scores will also determine your interest rates. Interest rates: The lower your LTV, the better your interest rates will likely be. ![]() So you can’t bank on a low LTV to get your loan approved. Lenders will also look at your income and creditworthiness during the approval process.
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