PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Loans
Car Loan
Compare Car Loans with Jerry
Jerry's Expert Advice
Car Loan Guides
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
What acts as collateral for a car loan?
I want to get a car loan, but I need to know what will be used as collateral first. Is the car the collateral? Or something else?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
A
car loan
usually uses the vehicle you’re buying as collateral for the loan. However, you don’t have to go this route.If you don’t want to use the car as collateral, you may be able to get a personal loan to pay for the vehicle. While this type of loan has a much higher interest rate, if you default, the lender can’t come after your car.
If you have great credit and haven’t missed payments in the past, a traditional car loan with the car as collateral is still advisable due to a far lower interest rate than a personal loan.
If you decide to go through with a car loan, remember that your lender will require you to purchase
full-coverage auto insurance
. Use the Jerry
app to compare competitive quotes from the nation’s top insurers for free.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 for Your Car
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
