How is the loan-to-value ratio decided for used cars?

Most lenders decide the loan-to-value (LTV) ratio for a used car by looking at what the car is actually worth today not the asking price, but its real market value. What the lender finally offers usually comes from a few key details they review during valuation.

• Newer cars with fewer kilometers usually get a better LTV. Older ones drop quickly in value, which is why the lender does not usually finance a large share. Many people check this during a test drive and note it down.
• A car that’s been serviced on time, with no major repairs or rough use, is valued higher. If the service booklet is irregular, the LTV comes down. At this stage, some lenders send an evaluator for a quick look.
• Even repaired damage affects resale value. Lenders check claim history in the background, and a mismatch often leads to a smaller sanctioned amount.
• Demand varies by city. A model that sells fast in one market may be slow in another, so valuations shift. Buyers often notice this only when the branch mentions it.
• Regular salary credits and clean loan history may slightly improve the percentage.