Help with LTV Understanding

[Anonymous]

Im gardening but need something to occupy my mind and want to continue learning about credit. Im gardeing to age new cards and to rehab defaulted loans. 

My car is almost 14 years old. Planning to bite the bullet begining of next year. 

Just to find out where I stood as of today, I did the Capital One Auto Nav. 

My question is: How do I take the amount they approved me for and figure out the LTV for that amount? Or does that not even make sense? I know for sure that I want an Acura. Im fine with a gently used one. Does the LTV correspond with the amount you are qualified for? 

When I get ready to do it, I just want to cut as much of the headache as possible and know exactly what to pin point when I start the process. Im no math wiz and I dont want to shoot for a car that is outside if the LTV. 

I searched a little and came across this thread, but Im still a bit lost.

http://ficoforums.myfico.com/t5/Auto-Loans/CAPITAL-ONE-Blank-Check-Approval-30-000-LTV-HUH/td-p/1467...

Edit: Misc Info

Fico 8 Scores:

EQ: 608
TU: 661
EX: 600

Auto 8 Scores

EQ: 625
TU: 676
EX: 611

[Anonymous]

For example if you put $3k down and your car is $42k your value is the $42k the loan would be $39k (loan) so factoring in your downpayment of $3k, your value is the original cost of the car $42k; so for LTV you would divide the 39k by 42k that would give you 92.8% LTV

The approval amount that Cap One gives is the max you have to spend overall after the cost of the car minus any downpayment

Hope that helps....definition from a lender perspective: Loan to value ratio (LTV) is the relationship between a property value and the amount of loans against it. LTV is calculated by dividing the loan amount by the property value.

[Anonymous]

So in essence, the LTV doesnt really matter? In other words, does it boil down to me putting down enough to cover the difference between vehicle cost vs the max amount the finance company is willing to lend? Or am I still offbase? 

[Chris679]

It matters if you have poor credit and a lender requires a down payment to keep the LTV down.

It also matters if you have negative equity on your trade in and you are trying to finance more than the car is worth.