Gauging the Price of a Used Car Via Auto Financing

In order to qualify for financing a used car or new car, most financial institutions will require a down payment of between 20 and 25 percent down. The lending agency will authorize a maximum amount, referred to as a finance value or loan value. The value will qualify the borrower for a specific car model and year. Generally, the finance value is approximately 25 percent less than the normal retail value of the vehicle. As a result, the loan value or finance value are excellent ways to gauge the affordability of the seller's asking price.