Vehicle Equity
Vehicle equity is the part of your car’s value that you truly own. You find it by taking your vehicle’s current market value and subtracting anything you still owe, such as an auto loan balance. When your car is worth more than you owe, you have positive equity.
How to Calculate Vehicle Equity
Working out your vehicle equity takes two numbers and one simple step:
- Find your car’s current market value using a trusted pricing guide.
- Look up the balance you still owe on any auto loan or lien.
- Subtract what you owe from the market value to get your equity.
For example, if your car is worth $9,000 and you owe $3,000, you have about $6,000 in vehicle equity.
Why Vehicle Equity Matters
Your vehicle equity shows how much of your car’s value is really yours. It plays a role in a few everyday situations:
- It may serve as collateral if you apply for a title loan.
- It affects how much you might get if you sell or trade in your car.
- It gives you a clearer picture of your overall assets.
Some lenders let you borrow against the equity in your car. A LendNation title loan uses your vehicle as collateral, and the amount you may qualify for depends on your vehicle’s value and the rules in your state.
Positive Equity vs. Negative Equity
Not every car has positive equity. The difference comes down to what you owe:
- Positive equity means your car is worth more than your loan balance.
- Negative equity, sometimes called being “upside down,” means you owe more than the car is worth.
- Paying down your loan and keeping up with upkeep may help you build equity over time.
What Affects Your Vehicle Equity
A few things move your equity up or down:
- Depreciation, since most cars lose value as they age.
- Your loan balance, which drops as you make payments.
- Mileage and condition, which shape the resale value.
- Demand for your make and model.
Frequently Asked Questions
How do I find my car’s current value?
Check a trusted vehicle pricing guide or online valuation tool. Enter your make, model, year, mileage, and condition to get an estimate you can use in the equity formula.
Does vehicle equity affect my credit score?
Vehicle equity is not part of your credit score. Your score reflects things like payment history and credit use, not the value of your car.
Can I use vehicle equity to borrow money?
You may be able to. A title loan uses your vehicle as collateral, and the amount depends on your car’s value and your state’s rules. Terms vary, so review them before you sign.
Summary
Vehicle equity is the share of your car’s value you own outright, found by subtracting what you owe from its market value. It may act as collateral, guide a sale or trade-in, and show where you stand financially. Products, amounts, and eligibility vary by state, so check your local store page for details.
If you want to see what your vehicle equity could do for you, you can apply online or find a LendNation store near you.