Loan-to-Value Ratio

In auto financing, the Loan-to-Value (LTV) ratio represents the percentage of a vehicle’s value being financed through the loan.

A lower LTV indicates the buyer has more equity in the vehicle (usually via a larger down payment or trade-in), which reduces risk for the lender. Canadian dealerships must consider LTV to ensure deals meet lender guidelines and to help prevent customers from owing more than the car is worth if the vehicle depreciates.

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