1. SkipCarDealer
  2. Glossary
  3. In AB, what should I know about loan-to-value (LTV) for car loans?
In AB, what should I know about loan-to-value (LTV) for car loans?
Open Your Account
Car Loan Glossary • ab

In AB, what should I know about loan-to-value (LTV) for car loans?

In Alberta, Loan-to-Value (LTV) for a car loan is calculated by dividing the total amount financed by the vehicle's appraised market value. Lenders utilize LTV as a primary risk assessment metric, indicating their exposure against the collateral's worth. While no specific LTV caps are provincially mandated, Canadian lenders typically cap new vehicle loans around 100-120% (to accommodate GST and fees) and often lower for used vehicles, generally 90-100% of wholesale or retail value, depending on the vehicle's age and condition. A key provincial nuance in Alberta is the absence of provincial sales tax, meaning only GST is added to the vehicle price, which can result in a comparatively lower LTV for the same vehicle price than in provinces with PST. For you, a consumer, understanding LTV is crucial because a lower LTV often leads to better interest rates, easier loan approval, and reduces the risk of being "upside down" on your loan - owing more than the car is worth - which is particularly relevant in the potentially volatile used car market of 2025. Making a substantial down payment or having significant trade-in equity directly lowers your LTV, signaling less risk to the lender.

References:

Related Topics: ab province topic

Related Financial Terms

Is it possible to I repay a car loan early?

Yes, it is generally possible and often financially beneficial to repay a car loan early i...
What is the sales tax on vehicle purchases in AB?

In Alberta, vehicle purchases are subject solely to the federal Goods and Services Tax (GS...
Explain the sales tax on vehicle purchases in AB?

In Alberta, the sales tax on vehicle purchases is exclusively the 5% Goods and Services Ta...
What is the sales tax on vehicle purchases in AB in Canada?

In Alberta, the sales tax on vehicle purchases is exclusively the 5% Goods and Services Ta...

Need more help?

Explore our full glossary or get in touch with our financing experts.

View Full Glossary
Search Glossary
Type a keyword and hit enter
Browse by Letter
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Popular Terms

Ready to get approved?

Skip the dealership hassle and get pre-approved for your car loan today.

Apply Now

With over 50 years of experience in the automotive industry, we know what we're doing when it comes to getting the best deals. We specialize in credit building and rebuilding, and with our expertise, we're sure to find a solution that suits you! Its our Skip Car Dealer Guarantee.

Credit Solutions

Loan Types

Programs

Partners

155-2 King Street West, Unit #107, Hamilton, ON, L8P 4S0 888-270-SKIP (7547)

PARTICIPATING LENDERS MAY VERIFY YOUR SOCIAL INSURANCE NUMBER, DRIVER'S LICENSE NUMBER, PROVINCIAL ID, OR ANY OTHER GOV IDENTIFICATIONS AND REVIEW YOUR INFORMATION AGAINST FEDERAL DATABASES TO INCLUDE BUT NOT LIMITED TO EQUIFAX, TRANSUNION, AND EXPERIAN TO DETERMINE CREDIT WORTHINESS, CREDIT STANDING AND/OR CREDIT CAPACITY. BY SUBMITTING YOUR APPLICATION AND INFORMATION ON THIS WEBSITE, YOU AGREE TO ALLOW ANY AND ALL PARTICIPATING LENDERS TO VERIFY YOUR INFORMATION AND CHECK YOUR CREDIT. SKIP CAR DEALER FOLLOWS BEST PRACTICES OF THE CANADIAN FAIR TRADING ACT OF 1999. ALL FINANCE IS SUBJECT TO EMPLOYMENT STATUS AND INCOME. APPLICANTS MUST BE 18 OR OVER, TERMS AND CONDITIONS APPLY, GUARANTEES AND INDEMNITIES MAY BE REQUIRED. WE CAN INTRODUCE YOU TO A NUMBER OF FINANCE PROVIDERS BASED ON YOUR CREDIT RATING. WRITTEN QUOTATION ON REQUEST.

This site uses cookies so that we can provide you with the best user experience. By continuing to use the site you are consenting for cookies to be used. Further information on cookies and how you can disable them is available on our cookie policy.

Copyright © 2020 Skip Car Dealer All Rights Reserved.

Terms of use | Privacy Policy

Top