What is LTV (Loan-to-Value Ratio)?
The ratio of the total loan amount compared to the book value of the vehicle being purchased.
Understanding LTV (Loan-to-Value Ratio) in Dealership Operations
Loan-to-Value (LTV) is a primary metric lenders use to assess risk. If a customer is buying a car with a book value of $20,000 and needs a loan of $24,000 (due to negative equity, taxes, or F&I products), the LTV is 120%. Different banks have different maximum LTV allowances based on the customer's credit score. Desking software calculates LTV in real-time so managers know which banks will approve the deal.
How CarSalesSoftware.com Handles LTV (Loan-to-Value Ratio)
Our all-in-one dealership operating system includes dedicated tools to help you manage ltv (loan-to-value ratio) more efficiently. Stop paying for disconnected systems and bring everything into one unified platform.
Related Glossary Terms
ACV (Actual Cash Value)
The true wholesale value of a vehicle, representing what a dealership is willing to pay for a trade-in or purchase at auction.
Automotive CRM
Customer Relationship Management software tailored for auto dealerships to track leads, manage follow-ups, and monitor the sales pipeline.
Back-End Gross
Profit generated in the F&I office through financing reserve and the sale of aftermarket products.