PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
Can you buy a car with a home equity loan?
My car’s engine just failed and I need a new one. I have an equity loan from my mortgage lender, but can you buy a car with a home equity loan?
Matthew Macgugan · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Sorry to hear about your car troubles. Yes, you can use a home equity loan to buy a car. But, since the terms of home equity and auto loans are very different, avoid making a decision based solely on the rate percentage for each loan. Also, consider the following risks when making your decision:
- Your home is leveraged as collateral if you can’t pay back a home equity loan. So, you risk foreclosure if you use the equity loan to purchase a vehicle and the loan repayment plan is too much to swing.
- Home equity loans have long repayment terms. The last thing you want is to be stuck paying off a vehicle you don’t drive anymore! But, if you need a car now and don’t mind a longer repayment term, then a home equity loan should work for you.
- Risk of upside-down mortgage. Using your home equity loan to purchase a car will result in a decrease in your home’s equity. If the value of your home decreases below the current balance of your loan, it becomes an upside-down loan, and you risk owing money should anything happen to your home.
Just answer a handful of questions that will take you roughly 45 seconds to complete and you’ll immediately get car insurance quotes for coverage similar to your current plan. Jerry customers save an average of $879 a year!
Good luck!
View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies