best guaranteed car finance

How much you pay for your new car and what it's worth in the eyes of the lender? This calculation is known as the LTDF or loan to value ratio, and is a powerful piece of car finance approval puzzle.

LTDF is a way to verify that in the event of the borrower defaulting, the lender can recover their money, however, the sale of the car. How calculated the value and how can the LTDF is used for an applicant's benefit?

The value of a car is determined by the lender and then the amount borrowed will be measured against this. The value is not the purchase price, but a figure determined by measuring the sales prices of the particular model in a wide range of sellers including the reseller, private and auction.

LTDF is measured as a percentage, i.e. borrow $ 15000 for a car that has a value of $ 15000 and your LTDF is 100%. 100% LTDF specifies that the lender feel that sale of the car will get exactly the amount of money back. Go over 100% and the lender takes a much greater risk if they have to take the car away from defaulting borrower sale will not recover amounts left structures. Most finance companies will have a maximum LTDF, that they would be willing to accept, regardless of how strong the rest of the application is.

Knowing the LTDF can really enhance the applicant's chances for car finance approval. Other end of the scale LTDF is if loan amount is lower than the value of car, for example. If you borrow $ 5,000 for a car worth $ 10,000 LTDF is 50% and the lender would feel confident that in the event of the borrower defaulting on payments, will the money they have borrowed defiantly recovered from the sale.

Ways to reduce the LTDF may include having a larger deposit to reduce the amount of money borrowed, or to get a great deal on the purchase price would equate to a lower loan and again lower LTDF and finally a good broker will know what cars have a higher value in the eyes of a lender. This is known in the car financing trade as "booking well", some cars keep their values, good relationship with their sales price and an industry insider to learn these cars.

Do some research and find a way that you can reduce the LTDF on your car your purchase is often key in approval, financing company have confidence that they can recover their loan amount often allow a program that has set of weaknesses in other areas should be approved.

Use LTDF to your advantage to get an easy approval. Get the inside knowledge from a car finance broker and ensure your program has the best chance of being approved.

To find out more about car finance Czechs LTDF Finance HQ for our free articles and online financing tools.