Actually, the car loan value is considered important since you can use it to the maximum amount that may be financed either on a new car or used car when you purchase. The car loan value is designed or established in order for the lender to limit the amount in financing on a depreciating asset such car.
The lender must be aware of the loan amount which extends to borrower on a particular car for the reason that a loan for an amount is written greater than a car or vehicle’s true market value increases a buyer’s likelihood to default on the loan.
Before you purchase a car through auto loan, it is wise to know first the car loan value before you search for a car of your needs or want. It is a smart idea to know the car loan value first of the car you consider to purchase either new or used. The fact that whether it is old or new, it really doesn’t matter since car is also an investment but not for life time and you also have to consider your monthly budget when you avail for a car loan.
People know that car is necessity but if you have more than 3 cars then that is another story and can be considered as luxury. As long as the car is in good condition, run smoothly and not really out model. The car values vary in different regions and by determining the value of a new auto loan, the price receipt is taken into consideration and use as proof.
The car loan is assessed on the base of the cars and model, safety records and mileage of the car. Although there are certain consideration which include the manufacturer’s suggested retail price and add- on features such as audio, alarm, air bags and others.
As borrower, you also need to know the interest rates of the auto loan you are having and the down payment needed. There are many ways of determining auto loan value, take note that car loan value is not only for used cars but can also be avail in a new car. For sure when you have your car loan, the lender requires your credit score which is mostly the key factor in the size and expense of the loan you will receive.
Most lenders which include the banks, traditional lenders require higher credit score in order to qualify your for a low cost car loan and if ever your credit score is lower, then you need to wait to have your credit score go high before you can purchase a car through car loan.
Determining the car values in used, its age and conditions:
- Date of the receipt or invoice
- The model and brand
- The mileage of the vehicle
- Age of the vehicle
- Any strained or ripped in the interior
- Any scratched or dented in the exterior
- Car engine condition
Usually the loan value on a new car is equal to the car’s MSRP or dealer’s price invoice and that depends on the lender. If ever you loan requires you to a finance with an amount that is over 100% of the invoice price, then expect to face a higher interest rate or you may be required to have a down payment.
For a used car, calculating is more complicated compared to a new model since with used cars, the lender base their loan valuation on the fair book value. Usually this may result to limited total amount that can be financed on a used model. Take note that car loan value is calculated differently by each lender.