How car equity release works
The short version is four steps: work out whether there is a case, get terms, value the car, release the money. This page is the long version, including the parts that go wrong and what they cost when they do.
- First conversation
- About 15 minutes
- Terms in writing
- 2 to 5 days
- Funds released
- 1 to 3 weeks
- Searches before you agree
- None
Step one: establishing whether there is a case
The first conversation takes about fifteen minutes and covers four things: what the car is, what you believe it is worth, what is still owed against it, and whether the borrowing is personal or for a business. Nothing touches your credit file at this stage and nothing is submitted anywhere.
The arithmetic is simple enough to do in the call. A car at £150,000 with £45,000 owed has £105,000 of equity. A lender advancing 70 per cent of value lends £105,000, settles the £45,000, and releases £60,000 to you.
Most cases that will not work are identified here, and that is the point of doing it first. A car in negative equity does not release money, and finding that out in a fifteen minute conversation is considerably better than finding it out after a valuation and a credit search.
What to have ready
The registration, the rough mileage, and a settlement figure from your current lender if there is finance on the car. The settlement figure is the single most useful thing you can bring, because it is what the calculation actually uses.
What we will tell you
Whether there is a case, roughly what a lender is likely to advance, and roughly what it would cost to service. If the answer is that it does not work, you get that answer rather than an application.
Step two: getting terms in writing
We approach the lenders whose appetite fits the case rather than all of them. That is not a courtesy, it is arithmetic: a credit file carrying a run of applications is worth less than a clean one, and it gets harder to place with each search on it.
Which lenders those are depends on the car. The lenders who advance against a current model in volume are not the same ones who will lend against something out of production for fifteen years, and a broker who sends every case to the same panel is not doing the part of the job that has value.
Terms typically come back within two to five working days. You see them in writing: the advance, the rate, the term, the total payable across the term, the arrangement fee and the early settlement position. Nothing is formally submitted and no search is run until you have seen those numbers and told us to proceed.
Step three: valuing the car
The lender values the car, and on the sort of car this site covers that usually means a physical inspection rather than a desk exercise. This is the stage that takes the longest and the stage where timescales most often slip, because it depends on getting an inspector to the car.
What the valuer looks at: condition, mileage, originality, specification, service history and the number of owners. On a car out of production the history file does real work, because comparable evidence is thinner and the individual car has to carry the argument.
The valuation is the lender's number, not ours and not yours. Where it comes in below expectations the advance falls with it, which is why the indicative figures across this site are described as indicative rather than as valuations. Nobody has seen your car.
Step four: settlement, security and release
The lender settles any existing agreement directly with the outgoing lender, so the money does not pass through your hands and there is no window where two agreements are live against the same car. Any surplus is then paid to you or into the business.
Security is registered against the vehicle. In practice that means the car cannot be sold while the finance is outstanding, and a check against the vehicle will show the lender's interest. It does not affect possession, use, insurance or anything else about owning the car.
The agreement then runs. On the example above, £105,000 over 48 months at an indicative 8.9 per cent is about £2,608 a month and £125,181 in total. When the final payment clears, the security is released and the car is unencumbered again.
What goes wrong, and what it costs
Three things account for most delays. A settlement figure that was never requested, so the arithmetic is running on a statement balance that is not the real number. A V5C in the wrong name, usually because a car was bought through a company and registered personally or the reverse. And an agreement nobody mentioned that appears on the vehicle check.
All three are cheaper to resolve at the start than in the middle, and all three are the reason the first conversation asks about ownership and outstanding finance before anything else.
The fourth, less common but more expensive, is a valuation that comes in materially below expectation. There is no fix for that other than accepting a smaller advance or not proceeding, and it is the reason we describe published figures as indicative in every place they appear.
Who we are and are not
We are an independent finance company. We arrange the agreement with specialist lenders and we are not a lender ourselves, not a dealer, and not tied to anyone selling you a car. We are paid by the lender on completion.
We publish no minimum advance. A minimum reads as an entry threshold, and it implies the site covers only unregulated business lending, which is not what is on offer. The advance band across the site is 50 to 70 per cent of a car's value, and the sums that produces range enormously depending on the car.
Where an agreement is regulated consumer credit, it is arranged through an FCA authorised broker partner and that firm is responsible for the regulated activity and for any advice given on it. Business agreements entered into wholly or predominantly for business purposes are not regulated consumer credit and we arrange those ourselves. You are told which route your case takes before anything is signed.
How car equity release works questions
- How long does car equity release take from start to finish?
- Usually one to three weeks from first conversation to funds released. The variable is the valuation: a current model with a live market moves quickly, while a car needing a physical inspection takes as long as it takes to get an inspector to it.
- Will you run a credit search before I have agreed to anything?
- No. Appetite is established with lenders informally first, and nothing is formally submitted until you have seen the terms in writing and told us to proceed.
- Who pays you?
- The lender pays us a commission on completion. You are told what that arrangement is before anything is signed.
Start the first conversation
Tell us what the car is and whether anything is still owed on it. We come back with what a lender is likely to advance against it and what that would cost to service. If the answer is that it does not work, that is the answer you get.