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Hi. I've come here a lot and browsed people's answers, but decided to join since I couldn't find an answer to this.
I am rebuilding my credit after a year of neglect (2009...pre-amazing credit, post-decided to ignore paying all of 'em...yikes!) and thus have an average score that I am continuing to build back up to the top.
I am in the process of getting a new car and recently got a Capital One blank check approval for $18K. My question is this - I found a car that (hopefully, once the dark check comes in the mail) will fall just within this range, but am completely confused by the LTV of 110% I'm given. Do I have nothing to worry if, say, the car is going for $17.5K and my check maximum to write is $18K?
LTV means the amount of the loan to the value of the auto. In this case, they will finance a car that is up to 110% of the value of the car. The value of the car refers to the blue book value of a used car or the MSRP of a new car. It's important that you research the value of the car you are interested in buying before hitting the dealerships anyway so you can make sure you are not getting a bum deal. In your case, if x brand of car is worth $10,000 via blue book, but the dealership is selling it for $11,000, the LTV, if you put no cash down, would be 110%.