Bank Finance - Vehicles - Asset or Liability

[InvestorDan]

Hi everyone,

While playing with some online mortgage calculators (borrowing power) I was given the option of entering details (value, financed or not) of vehicles that I own.

Just made me think does the bank see a vehicle as an asset or liability?

I have two cars (only use one really) and both are valued under 10 grand.

Would like to know your thoughts.

-Dan

 

[Propertunity]

The vehicle is an asset. The loan on the vehicle is a liability.

 

[Terry_w]

Generally seen as worthless in terms of assets. If you were to become bankrupt you can even keep a car under a certain value - about $8k. So it is not property they would generally look at seizing.

It should have no effect if you have 1 car or no car for most serviceability tests as the lenders do not include running costs etc separately.

Loans or leases will clearly be a liability.

 

[Rolf Latham]

Serviceability can be affected if your expenses are properly declared if you are borderline Or you have access to a fmv yet still have a private vehicle. Most lenders will give you you some puny credit for a fmv

Ta

Rolf