What loan-to-value means
Loan-to-value, or LTV, compares the requested loan amount with the value a lender recognizes for the vehicle. Lenders use that percentage to judge how much is being financed compared with the collateral supporting the loan.
Loan amount ÷ lender-recognized vehicle value × 100 = LTV
A simple $10,000-value example
Imagine a lender values a vehicle at $10,000 and Korea Auto Group is selling it for $9,000. If the buyer puts $500 down, the simplified amount left to finance is $8,500 before taxes, title, registration, negative trade equity, optional products, or other financed amounts.
In that simplified example, the requested loan is $1,500 below the lender-recognized value: $1,000 because the selling price is below that value, plus the buyer’s $500 down payment.
$8,500 loan ÷ $10,000 value × 100 = 85% LTV
Why that can make $500 down more possible
An 85% LTV may fit more comfortably within a lender’s maximum advance than a deal where the loan is close to—or above—the vehicle’s recognized value. That value cushion can make a smaller down payment more workable for a qualified applicant.
The comparison is different if the same $9,000 vehicle is valued by the lender at only $8,000. Even before other costs, an $8,500 loan would equal about 106% LTV. A lender might then require more cash down, a different vehicle, different terms, or may decline the request.
What can change the real calculation
The actual amount financed may include taxes, title and registration costs, approved optional products, or unpaid negative equity from a trade. Those amounts can raise the LTV. Additional cash down or positive trade equity can lower it.
Lenders also consider factors beyond LTV, including credit history, income, existing debts, debt-to-income ratio, vehicle age and mileage, APR, and loan term. Some lender programs allow different maximum LTV levels, so no single percentage guarantees an approval.
How our experience helps
Korea Auto Group can compare the structure of past completed purchases—without sharing customer identities—to recognize combinations of vehicle value, selling price, down payment, amount financed, APR range, term, and monthly payment that have worked before.
That experience helps us discuss a more realistic vehicle or starting structure. It is guidance, not a promise that a new applicant will receive the same approval, rate, payment, or down payment. The participating lender makes the final decision.