Many of us have found ourselves in the position of needing money urgently. Maybe it’s due to an unforeseen medical expense, home repairs or maybe even unplanned travel. If you don’t have enough saved, you might have considered an auto title loan – but how much would you be able to borrow?
How Do I Know the Value of My Vehicle?
An auto title loan uses your vehicle as collateral for the loan, so the amount you can borrow is partly determined by the value of the vehicle.1 If you want to get an idea of how much your car is worth, you could try visiting a website like Kelley Blue Book, Edmunds, or CarGurus and then entering your vehicle’s information.
Both these sites are a great resource for both trade-in and private sale prices, but they might not necessarily give you an accurate idea of how much you could borrow.
Every lender has their own rules and guidelines, but before you can get a title loan, they’ll need to evaluate your car. Once they’ve done that, they’ll know how much they’re willing and able to lend you.
Of course, not every vehicle is worth the same, but most lenders will value your vehicle based upon the following criteria:
- Make and Model
- Year of Manufacture
- Physical Condition
- Title Status
- Optional Extras
- Your Location
Perhaps the biggest influences on your vehicle’s value is its year, make and model. Another big factor is the mileage of the vehicle. The higher the mileage, the more wear and tear the engine may have, causing the value of the vehicle to drop. On average, you can expect to add about 1,000 miles a month, or roughly 12,000 miles a year, onto your car’s odometer. Higher than average mileage will reduce the car’s value, while the reverse is true for cars with a lower-than-average mileage.
Similarly, two cars of the same make and model may have different values if they were made in different years – even if they have the same mileage. That’s because although the engines have probably had about the same amount of wear and tear, the bodywork and other moving parts (such as the doors, hood and trunk) probably won’t be in the same condition.
The general condition of the vehicle is also taken into account. This doesn’t just mean the exterior, but also the interior too. If your car’s air conditioner or electric windows don’t work, or there’s damage to the seats, this will bring down the value.
Has your car ever been in an accident? That can also affect its value, especially if the insurance company determined the car should be written off. That happens when they calculate the cost of repairing the car is more than the car is worth. The insurance company takes possession of the vehicle, notifies the DMV that it will be scrapped and then sells it to help recover their costs.
However, the new owner isn’t required to scrap the vehicle. Depending on the situation, they might decide to fix the vehicle and then re-sell it. That being the case, the DMV must be notified so the vehicle’s title can be updated to show the vehicle has been salvaged.
This typically halves the value of the vehicle – regardless of the reason why it was written off or salvaged. For example, even if it hasn’t been in an accident, a car can be written off. If a vehicle is badly vandalized, the insurance company could still write it off, even though it might still be structurally sound.
If your car has any optional extras (such as heated seats or a sunroof) this can also help to boost its value but be aware that upgrades you may have installed yourself (for example, a car stereo and speakers) may not be taken into account.
Lastly, and perhaps surprisingly, your location is also a factor in the value of your car. Many lenders will use software to calculate the value of your vehicle and (like the websites mentioned above) they’ll ask you for the zip code in which you live.
The software will then search for recent auction sales for similar vehicles to get an idea of how many have been sold recently and how popular the car might be. If your car is currently in high demand but there aren’t many being sold, then its value will be higher.
How Will a Lender Value My Vehicle?
Once the lender has an idea of how much your vehicle is worth, they’ll determine how much they’re willing to lend you. Again, every lender has their own rules and guidelines, but many of them won’t be willing to lend you the full value of your car.
The reason is because the loan term will most likely be for a minimum of a year and could be for as long as five years. It’s very unlikely your car will hold its value over that time, so the lender will automatically take into account its depreciation.
Another, more unfortunate factor is the possibility of repossession. If you stop making your payments, the lender has the right to repossess the vehicle and sell it at auction to recover what you owe. Since it’s unlikely to sell for its full value, the lender would potentially make a loss. As a result, many lenders will use the average auction price as a starting point.
Which Auto Title Loan is Best for Me?
There are many different auto title loans available on the market, so how do you know which one is best for you? You could try calling around and getting quotes, but it can be a time-consuming process.
A quicker and easier solution is a ChoiceCash Auto Title Loan, serviced by LoanMart. To get started, visit www.choicecash.com or call 855-277-4847 toll-free and, after answering a few basic questions about you and your vehicle, you’ll find out if you’ve been pre-approved and how much you could borrow.1 The whole process takes just a few minutes.1
Concerned about your credit score? There’s no need to be! Since you’re using your car as collateral, your credit is not a major factor in the approval process. This makes it easier to get the money you need, even if the other lenders turn you down.1
A ChoiceCash Auto Title Loan can also offer other benefits that are hard to find elsewhere. Besides having up to three years to pay and no prepayment penalties, you could also enjoy payments that actually go down every month.2
Here’s how it works: when you make your monthly payments on-time, your annual interest rate can be reduced a little.2 Your next month’s payment is then automatically reduced, putting a little money back into your pocket.2 Continue to make your payments on time and your payments will continue to drop!2
What if you need more money in the future? With a ChoiceCash Auto Title Loan, serviced by LoanMart, you can potentially borrow more when you need it – and at the same low rate of interest you’ve earned on your existing loan.2
With higher approval rates than traditional loans, three years to pay, no-prepayment penalties, payments that can go down, and the ability to potentially borrow more, it’s easy to see why a ChoiceCash Auto Title Loan is quickly becoming a popular choice with borrowers.1 To find out how a ChoiceCash Auto Title Loan can benefit you, call 855-277-4847 toll-free or visit www.choicecash.com. The whole application process can be completed at home, with no store visits, and you could be holding your cash in your hands within hours!1