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What are Auto Equity Loans?

Last Updated

May 1, 2023

Written By

Sarah Kearney

Auto Equity loans allow you to tap into the equity you have in your vehicle to fund vacations, home repairs, wedding expenses, or whatever else you need! They are secured by the value of the vehicle, so they typically have a much lower interest rate than a personal loan or a credit card, making them a great, affordable financing option. Interest rates are determined by your credit score, loan term, and the year/make/model of the vehicle.

Do I have Equity in my Vehicle?

You can determine how much equity you have by finding the difference between your vehicle’s value and the amount still owed on your auto loan. Did you make a down payment when you purchased your vehicle? Or maybe you’ve been paying extra each month to pay off the loan sooner? If you said yes to either of these, chances are you have equity in your vehicle!

Let’s say you currently owe $5,000 on your vehicle and its NADA value is $15,000. This means you have $10,000 worth of equity that you can tap into! Still not sure? Contact us to find out if you’re eligible for an auto equity loan!

Benefits of an Auto Equity Loan 

Lower Interest Rates – Auto equity loans have the same interest rates as auto loans, which are typically much lower than personal loans because they are secured by the vehicle. This means the vehicle is being used as collateral which makes it less of a financial risk to the bank or credit union financing your loan.

Fast Approval Times – Turn-around times for Auto Equities are quick – in fact, if we have the necessary paperwork they can be approved and funded the very same day you apply for the loan! 

Borrow More – At Family First, you can borrow up to 100% of the vehicle’s NADA value!

Can Be Used for Anything – Once the funds are disbursed, you can use them however you need, whether it’s for a vacation, wedding costs, home repairs, etc. There are no restrictions on what you can do with the funds borrowed. 

Something to keep in mind about auto equity loans is that they ARE secured by your vehicle – that means that if you can’t pay back your loan, you are at risk of your vehicle being repossessed just like a traditional auto loan. If you take out an auto equity loan and find yourself in this position, call your financial institution right away so they can work with you to find a solution.


Similar Products

If you don’t have equity in your vehicle, there are still plenty of loan products that you could be eligible for. Check out some of our other great financing options below!

Personal Loans – Personal loans are a great borrowing option, though they usually come with a higher interest rate because they are unsecured. Applying is easy and turn-around times are fast!

Home Equity Loans – If you own and have equity in your home, a Home Equity loan could be a great option for you. These loans generally allow you to borrow up to a specified percentage of your equity and have a more involved application process since they are classified as mortgage loans.

Credit Cards – Credit cards are another great alternative for financing, but this can be the most expensive option because of their higher interest rates. However, their quick turn-around times and easy access to funds make them one of the most convenient loan options.


Sarah graduated with her BFA in Graphic Design from the State University of New York at Fredonia in 2018 before beginning her career at Family First. Sarah is a designer, content creator, and community outreach coordinator. She received her certification in financial counseling in 2020 and is an active volunteer within the Rochester community. She is also on the Board of Directors for the Penfield Business Chamber and currently holds the position of Director of Special Projects.

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