Loan against my car
A loan against a car is secured borrowing: the lender takes security over a vehicle you own and advances money against it, while you keep the car and carry on driving it. It is the same product as car equity release, described the way most people actually search for it.
- You keep the car
- Always
- Advance
- 50 to 70% of value
- Indicative rate
- 8.9%
- Minimum advance
- None
How a loan against a car works
A loan against a car is a fixed-term advance secured on a vehicle the borrower owns. The lender registers an interest in the car, pays out the advance, and takes a monthly payment across the term. At the end the security is released and the car is unencumbered again.
Because the loan is secured, the rate is generally lower than unsecured borrowing of the same size and the amount available is generally higher. The trade is that the car is genuinely at risk if the payments stop, in a way that it is not with an unsecured loan. That is not a detail to gloss over: security means what it says.
The advance is a share of value rather than the whole of it. 50 to 70 per cent is the usual band. On a car at £85,000 that is £42,500 to £59,500, less anything still owed against it.
What a loan against a car costs
Take £85,000 of car, owned outright, with £59,500 advanced against it. At 8.9 per cent over 48 months that is roughly £1,478 a month, and £70,936 paid in total.
The two things that move that figure most are the term and the share of value advanced, and both are within your control. Asking for less against the same car improves the rate. Taking a shorter term raises the payment and lowers the total, usually by more than people expect.
What barely moves it is haggling over the headline rate. On secured lending against an asset the lender can value, the rate is largely a function of how exposed they are, which is why the loan to value is the lever worth pulling.
What a lender looks at before lending against a car
The car first. Make, model, year, mileage, condition, history and specification, and whether it is registered to you. A lender is lending against something it may one day have to sell, so how saleable it is decides most of the answer.
Then the borrower. Whether the payments are affordable, whether the credit history shows anything that needs explaining, and for a company application what the accounts look like. A strong car does not rescue an unaffordable payment, and a strong borrower does not rescue a car nobody can value.
Then what is already registered against the vehicle. Any existing agreement has to be settled out of the advance, which is normal, but it has to be known about at the start rather than discovered by a vehicle check halfway through.
What this is not
It is not a logbook loan. That is a different product, sold to a different market, at rates that would be indefensible here, and we cover the distinction in full on why this is not a logbook loan.
It is not property equity release. Nothing on this site is secured on a home, and we hold no permission to advise on lifetime mortgages or home reversion plans.
It is not a purchase. If you want to buy a car rather than borrow against one you have, that is a separate job with separate lenders, covered at Hypercar Finance.
Loan against my car questions
- Can I get a loan against my car if I still owe money on it?
- Yes, provided the car is worth more than the settlement figure on the existing agreement. The old agreement is settled out of the new advance and the difference is released to you.
- How much can I borrow against my car?
- Typically 50 to 70 per cent of what the car is worth, less anything owed on it. The exact figure follows the car's condition, history and saleability rather than a rate card.
- Do I keep driving the car?
- Yes. Possession never changes. The lender registers security over the vehicle, which prevents it being sold while the finance is outstanding, but the car stays with you and is driven normally.
Find out what your car will borrow against
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.