So i want to buy a car thats 25,000... I Got approved by a credit union for 39,000 and a LTV rate of 90%. The Market Value of the car i want is 50,000. What does this mean? Thanks all in advance.
LTV is Loan-to-Value. In other words, what percent of a car's value you can borrow.
For new cars, LTV typically equals MSRP. For used cars, finance companies typically use KBB or NADA values.
In your case, you can borrow up to $39k. However, you cannot borrow more than 90% of a car's value. So if the finance company's methodology also values the car at $50k, then you can borrow the lower of $39k or $50k*.9=$45k. So therefore, you can only borrow $39k against a $50k car.