Equity Release

How Equity Release Works for High Value Cars

To be eligible for equity release, you typically need to own a high value car, such as a classic, luxury, or prestige vehicle. A specialist will then conduct a vehicle valuation to determine its worth. The amount of cash you can release depends on several factors, including your car’s value, age, condition, and rarity.

Interest is charged on the amount released, and this interest usually compounds, meaning you’ll accrue interest on the interest already added. The loan and the accrued interest are typically repaid when you sell the car or at the end of an agreed term.

There are generally two common types of equity release plans:

• Lifetime Loans: With this option, you borrow against the car, and the loan plus interest is repaid when you sell the car or at the end of the loan term.
• Sale and Leaseback: This involves selling a portion or all of your car to the provider at less than its market value. However, you retain the right to use the car for an agreed period. Companies like Evogo Asset Finance can process the equity release and administer the application for you.

For guidance on tax implications and to ensure optimal tax efficiency, please consult a
qualified tax advisor or accountant. Evogo Asset Finance does not provide tax advisory
services.

Features and Benefits of Equity Release for High Value Cars

One of the primary benefits of equity release is access to tax free cash, which you can receive as a lump sum or a regular income. Crucially, you retain the use of your car throughout the agreement. In most cases with lifetime loans, you’ll also find no ongoing monthly repayments are required. Some lifetime loan plans even offer flexibility, allowing you to make voluntary interest payments to reduce the total amount owed. Reputable equity release plans are regulated and come with built in protections for your peace of mind.

Pros and Cons of Equity Release for High Value Cars

Pros:

• You can access cash without selling your car.
• You retain the right to use your car.
• In most cases, no ongoing monthly repayments are required.
• The released funds can be used for various purposes, such as restoration projects, other investments, or general expenses.

Cons:

• The amount owed will reduce your future sale proceeds, meaning you’ll get less when you eventually sell the car.
• Interest accrues over time, and due to compounding, the total amount owed can grow significantly.
• Equity release is generally a more expensive way to borrow money compared to a traditional loan.
• Taking out equity release could impact your overall financial situation.
• It might become more difficult to sell the car quickly if there’s an outstanding loan against it.

Who is Best Suited to Equity Release for High Value Cars?

Equity release is typically most suitable for specific individuals. It’s ideal for owners of high value cars who want to access their car’s value without parting with the vehicle itself. It suits those who want to retain the use of their car and isn’t usually recommended for people planning to sell the car soon.

This financial product can be very helpful for individuals who need a lump sum or extra income to fund things like car restoration, other investments, or cover various expenses. It can also provide a financial boost for people with limited savings or other income sources. Crucially, it’s for those who understand the long term implications of compound interest and the impact it will have on the car’s future sale value and their overall finances. Given its complexity, it’s essential for individuals who have sought professional financial advice before proceeding.