Equity is the difference between what something is worth if you sell it minus what you owe on it. For example the value of your home minus the mortgage or any other loans using the home as collateral.
If you owe more than something is worth, that is known as negative equity or being "upside down" or "under water" on a loan. That can happen with vehicle loans if you do not make a large enough down payment, because the vehicle may depreciated faster than you pay off the loan. And it happened in the housing markets when people bought homes at inflated prices at low variable interest rates, then interest rates went up, the bottom dropped out of the economy, and home values decreased to less than many people owed.
So equity is generally considered how much money you would end up with if you sell that item, not counting sales expenses. But those sales expenses (and uncertainty of markets and the economy) is why a lender requires a down payment and is very unlikely to loan you 100% of an item's value.
