What do banks use to determine car loan value?

I want to buy an Escalade, but it has tons of extras—such as an aftermarket stereo system, tinted windows, and 24-inch rims. As a result, it's more expensive than the Blue Book value. What do banks use to determine car loan value? Can I still get the loan?

Answer
That sounds like an Escalade of epic proportions! Fortunately, you may still be able to get a car loan, even if the price of the vehicle is more than the Blue Book value.
Most lenders use the National Automobile Dealers Association (NADA) book to determine the value of the vehicle. This allows them to input various options that could increase the value of the car. However, the upgrades you described may not be options in the NADA valuing system.
But that doesn’t necessarily mean you’re out of luck. If you have stellar credit, good income, and can make a decent down payment, you still might get approved. You may also choose to get an independent appraisal to argue your case for a larger loan.
If you’re approved, don’t forget to get the right insurance coverage. Lenders require full coverage auto insurance, so make sure to shop around to get the best rate. Download the Jerry app to compare dozens of quotes. Average Jerry users save $879 per year on car insurance!
Eric Schad
Answered on Oct 21, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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