If you purchased a vehicle with the help of car financing, the equity you have in that vehicle is difference between the vehicle’s value and the amount you have left to pay on your car loan. So, if your car is worth $20,000 and you still owe $12,000 on your car loan, you have $8,000 equity in that vehicle. If you owe more on your car loan than what the vehicle is worth, you have what is known as negative equity. For example, if your vehicle is worth $15,000 and you owe $18,000 on your car finance agreement, you have negative equity.
If you decide to pay off your loan before the end of the term, you may sell the vehicle and use the money from the sale to settle your loan. Once the car is worth more than the amount you owe on your loan, you may keep whatever money is left after you’ve settled your loan, minus any fees you may be charged for terminating the car finance agreement early. However, if the vehicle is worth less than you owe, you will need to pay the remainder of the loan out of pocket.
Using equity to get a new car loan
If you are trying to get a new vehicle, and you have some equity in your vehicle, you may apply for an auto equity loan. An auto equity loan is different from a car title loan. A car title loan requires you to have full ownership of the vehicle so you can use the title to secure the loan. On the other hand, with an auto equity loan, the lender allows you to borrow against the equity you have in your vehicle.
Are you looking for an auto equity loan in Surrey or Burnaby?
If you are looking for an auto equity loan in Surrey or Burnaby, come see us at Instant Auto Loans. Instant Auto Loans is an automotive financial institution that offers instant car loans based on the equity in your vehicle. Our car loans are short-term, straightforward, and you can easily qualify.
Our company has been family owned and operated since 1986. Since then we have provided specialty financing to individuals from all over Canada helping them overcome short-term financial obstacles. When you do business with us, you can rest assured that you will always receive courteous and confidential service.
So, what are you waiting for? Apply online and have your loan processed in less than 15 minutes.