what is an auto equity loan

What Are Auto Equity Loans and How Do You Use it?

Quick Title Loans has become a trusted source for car title loans in South Gate CA, for over five years. If you live in or near the area, you probably already know about us. In this article we will help you understand “whats my car worth?”.

We are proud of our professional, honest and safe money lending business. Our knowledgeable and experienced team can help you get the cash you need quickly.

Tell us if this sounds familiar. So, you’re in a panic because you need money fast, but your credit stinks, claiming bankruptcy was your only choice, and five years ago, your old car was repossessed. You really don’t know what to do, so you search the internet for any and all possible options. Then, you have a sigh of relief when you discover that a car title loan company in South Gate, CA., called Quick Title Loans, may be your solution.

But when you see words like asset, equity, and collateral, you truly don’t have a clue of what it means. It’s all very confusing. So what does it all mean? We’ll do our best to help you understand all of this accounting and finance mumbo-jumbo.

Defining your assets

Let’s start with the word asset. Officially, an asset is a useful or valuable thing, person, or quality. For example, you can be an asset to your company, or your happy-go-lucky personality is a real asset, and the car you own is an asset. However, in the world of finance and accounting, an asset is something you own that has value or equity.

Examples of assets include:

  • Ten dollar bill
  • A desktop or laptop computer
  • A smartphone
  • A chair
  • A car

In the case of car title loans in South Gate CA, your asset is the car that you paid off three months ago. Specifically, an asset is something that can be used to put cash in your pocket.

What is an auto equity loan?

So what is an auto equity loan? Equity is a fancy word for the worth of something you own. When we are talking about car title loans in South Gate CA., for instance, equity means the value or worth of your car.

Let’s break it down for you. You purchased your brand-new car a little over five years ago. Over that time, your car lost value or depreciated. In fact, it began losing value as soon as you drove it off the lot.

Even so, after five or six years, your car is still worth something. It still has value. We determine a car’s worth by estimating how much it goes down in value and how much we could sell it for on the open market.

Examples of equity for cars

  • Your car’s purchase price—$25,000
  • Your car goes down in value each year. Let’s estimate it will be about 12% annually.
  • Subtract the depreciation or about—$14,000
  • As a result, your car’s equity or worth is around $11,000 

You have owned your car since celebrating your last payment to the bank three months ago. And, because you own your car and received your title from the bank, your car’s value is approximately $11,000.

What is collateral for car title loans?

When we lend you money, no matter how quick and pain-free, the process is, we expect to get that money back within a reasonable amount of time. While there are those businesses that give away free money, often called donations, Quick Title Loans is not a charity.

Nevertheless, there is a certain amount of risk, or chance, that we won’t get that money back. So, we use collateral to protect our business.

Collateral is something of value you own that we will take if you cannot pay us back. In the case of a car title loan, the collateral you have is the value of equity in your car.

We’ll always do our best to work with you if you fall behind on your payments. But in the end, if you leave us no choice, we will take your car. We honestly don’t want your car, and it would be better for both of us if you make your payments on time.

Our fast and easy process and our staff’s professional and friendly explanations can help you get the cash you need when you’re in a bind and need money fast.

Car Title Loans In South Gate CA: Quick Title Loans

Quick Title Loans will be there for you with a car title loan in South Gate, CA. To get this process moving along, contact us today to discuss next steps.