What Affects the Loan You Can Get For a Car
If you’re strapped for cash and cannot get a loan from your bank, you can use your car (or other vehicle) as collateral for an asset-based loan. This is one way to get fast cash with no credit check or income verification needed, as the amount loaned to you is determined solely by the value of your vehicle. But how much is your vehicle worth as collateral?
Factors that influence the value of a vehicle
A number of factors influence the amount of money that you can borrow against your vehicle. First, the vehicle must be registered in your name and fully paid up in order for you to use it as collateral for a loan.
Then a range of factors that influence the value of the vehicle itself will help determine the total value of the loan you’re offered. Key factors are listed here.
Manufacturer
The brand of a vehicle has a significant impact on its value, regardless of the condition it’s in. Subaru, Hyundai, Audi, Honda, Mazda and Toyota, as well as luxury brands like Acura, Lexus and Mercedes, tend to retain their value more than other makes.
Model and age
Of course, the model of a car will help determine its market value, and therefore the value of a loan that can be offered against it. The age of a car is also a significant factor. Generally, the older a vehicle, the lower the value of the loan that can be offered. Lovingly restored classic cars may be the exception.
Condition
This includes exterior and interior condition – paint scratches, dents, torn upholstery and stained carpets are just a few of the aesthetic issues that can decrease a car’s value. The upkeep and condition of the engine and other mechanical parts will also impact the vehicle’s worth.
Mileage
Simply put, having fewer kilometres on the clock usually translates to a higher value when borrowing against a vehicle.
Colour
It’s true. Even the paint colour of your vehicle can influence its worth. Generally, white, silver and black cars have higher value than other colours. If you have repainted your car an unusual colour or combination of colours, this may diminish the car’s value.
Technology/accessories
Although expensive GPS and DVD systems do not always add the value of their upfront cost to a vehicle, there are certain technological features that improve a car’s value. For example, Bluetooth connectivity, satellite radio and a good-quality navigation system can improve a car’s worth.
Modifications
Adding certain features to your car can reduce its market value, given that buyers may not want a vehicle with the particular modifications you’ve made. Examples of modifications that can hurt the value of your car include painting it an unusual colour, installing loud exhaust systems, reupholstering the interior with low quality or overly colourful fabric, lowering or modifying the suspension and tinting the windows.
If you’re interested in securing an asset-based loan against your car, contact us for more information on 0861 112 866 or simply complete and submit our online application form
