Tap the equity on your automobile for a down payment?

[Kay Kay]

Hi-

Is it a good idea to tap the equity on your automobile that is fully paid towards a down-payment for buying a property?

In today's market, a good car that you own has a good market value. There are banks that are willing to refi or allow you to tap the equity/cashout upto 125% of the KBB value.

Interest rates are well below 4 to 4.5%. Any thoughts, ideas or am I missing something?

Thanks!

[Russ Eisenberg]

The car will depreciate so being able to sell it to get yourself fully out of financing in a bind could be tough.  If you have a stable income and reserves to cover it sounds like a good rate to me, but it definitely has risk.  Of course unless you have a very expense car it doesn't seem like it would be all that mich money.  If it is a very expensive car maybe a better plan would be to sell the car, buy something cheaper and use the leftover to invest interest free????