Question about LTV?

[Anonymous]

If a car I buy has an MSRP of $22,995, and the sale price is $19,779, and I put $4,279 down... what is my LTV?

Is the LTV calculated off the sale price or MSRP?

[Hoya08]

Your LTV is based upon the amount financed divided by financial institution's value of the asset.  The bank/CU may use KBB, NADA, MSRP, or Black Book, among others, to determine collateral value.

[pizzadude]

The LTV is the amount you borrow vs the book value of the car.    So the amount you are borrowing is 19,779 - 4,279 ----  15,500.   Note this assumes that all taxes, titles, fees, etc.. are included in the "sale price".  If not then you should add them in.

[Anonymous]

I'm paying taxes, fees, registration etc. seperately with cash. Should I still add it in?

[pizzadude]

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@Anonymous wrote:

I'm paying taxes, fees, registration etc. seperately with cash. Should I still add it in?

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Nope ~ since you're not borrowing it, those fees won't be included in the LTV.

[SamsungHDTV]

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@Anonymous wrote:

If a car I buy has an MSRP of $22,995, and the sale price is $19,779, and I put $4,279 down... what is my LTV?

Is the LTV calculated off the sale price or MSRP?

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MSRP and sale price are not directly used to calculate LTV.  Comes down to the actual loan amount divided by the car value (each lender may vary a little on what they value a car depending on which guide they use). Your sale price and down payment will determine your loan amount.

For example assume we're using your figures lets say the lender values your car at $20,000. You're loan amount is 15,500 (19,779 - 4279).

Then the math goes 15,500 / 20,000 = .775 or 77.5% LTV (which is great). IMO you get the best rates with 90% LTV or less given all factors are good.

Hope this answers your question.