What is equity?

Equity refers to the difference between the car finance agreement and the value of the vehicle. 

 

For example, if your car is worth £6,000 and there is £4,000 left to pay on the car finance agreement, there is £2,000 equity left in the value of the vehicle. Once you have paid off all outstanding debts associated with the car, it then becomes your equity, because you now own the vehicle.

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