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Is an auto loan secured or unsecured?

Are all auto loans secured? I thought car loans were secured loans but a friend of mine told me that he got an unsecured car loan for his son’s first car. Is this possible?

avatar
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
A great question! Most auto loans are secured by the vehicle that is being purchased. This means that, if you don’t pay your car loan, the bank can
repossess your car
. This kind of car loan is very common and is usually easier to qualify for.
However, it is possible to get an unsecured auto loan. This type of car loan will typically come with a higher interest rate, since it poses more risk to the lender, so it’s not always the best option. It’s also often more difficult to qualify for this type of loan too since the loan doesn’t have a built-in safety net for the lender.
While you’re learning more about car loans, why not learn how to save on your car insurance? It’s easy when you use
Jerry
. This app can help you find the best rates available on the coverage you need in a matter of minutes. Download the app and create your free account to get started.
Hopefully, that helps answer your question!
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