A common disappointment for borrowers is finding out they can't borrow the full Kelley Blue Book (KBB) value of their car. If your car is worth $10,000, you likely won't get a $10,000 loan.
The Loan-to-Value (LTV) Ratio
Lenders need to protect themselves against risk. If they lend you the full value of the car and you stop paying, they have to repossess it, pay auction fees, store it, and sell it—often losing money in the process.
To create a safety buffer, Idaho lenders typically lend between 25% to 50% of the vehicle's wholesale trade-in value.
The Calculation Example
- Car KBB Private Party Value: $8,000
- Car Trade-In (Wholesale) Value: $6,000
- Lender's LTV Cap (50%): $3,000
In this scenario, the maximum loan offer you would receive is roughly $3,000.
Can I Get More?
Some lenders might go higher (up to 60-70%) if you have exceptionally strong income proof and the car is in immaculate condition. However, borrowing the maximum amount isn't always wise, as it leads to higher interest payments.
Sarah Jenkins
Financial EditorSarah is a financial expert with over 10 years of experience in consumer lending. She is dedicated to transparency in the lending market.
