Experts generally advise against using home equity for a car unless you have a rock-solid repayment plan and can secure a rate significantly lower than an auto loan. For most buyers, a traditional auto loan remains the safer choice because it does not tie your primary residence to a depreciating asset.
: Vehicles lose value quickly—roughly 60% over 5 years . If you use a 20-year repayment term, you will likely owe money on the car long after it has reached the end of its life. heloc to buy a car
: Under 2026 IRS rules, interest on a HELOC is only deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Interest on funds used to buy a car is not tax-deductible . Summary: Is it worth it? Experts generally advise against using home equity for
: You are approved for a credit limit based on your home's equity (typically up to 80-85% of its value minus your mortgage). If you use a 20-year repayment term, you
: Since you pay the dealership in full with HELOC funds, you may have more power to negotiate a better price.
: Most HELOCs have variable interest rates. If market rates rise, your monthly payments will increase.
: The most critical risk is foreclosure . If you fail to make payments, you could lose your home, whereas an auto loan failure only leads to car repossession.