What is the highest loan-to-value (LTV) ratio allowed for used car financing?

The maximum loan to value (LTV) ratio for used car deals can fluctuate, but it is not uncommon to see offers for 100% of a vehicle's assessed value. Some lenders may be willing to exceed the vehicle's assessed value, which can occur with LTV ratios up to 115%* or sometimes even considerably higher in some special scenarios, which would allow the borrower to use loan proceeds for additional expenses like insurance, accessories, etc.

Lenders are typically working with LTV ratios set between 70% and 90% for regular used vehicle loans. Generally speaking, a higher LTV ratio will allow for a lower deposit or down payment to be utilised for the car thereby providing a lower barrier to impute the cost of purchase for buyers funded debt. LTV decisions are to some degree based on an applicant’s credit score and income, and then how many years old is the vehicle and its condition. The lender will evaluate risk appetite using LTV predicated by rules which will depend on the lenders loan criteria. Higher LTV ratios typically mean higher interest rates, or a stricter older borrower policy.