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What is an open car loan?
I’m in the market for a new car, but I need to finance one. I’ve read about both open-end and closed-end credit, and I think I get the difference. But what is an open car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
An open car loan is a type of loan that approves you for a certain credit limit and gives you the ability to borrow up to that limit. While open-ended credit is common with home equity loans and credit cards, it’s rarely used with
car loans
. If you can find an open car loan, consider yourself lucky.Most car loans are closed-end, which means you get approved for a certain amount and you pay that amount back over the length of the loan. With an open loan, you have no obligation to ever borrow any money, much like a credit card.
When you apply for a new car loan, you’re going to get a closed-end loan. But if you’re interested in an open car loan, it doesn’t hurt to ask.
Regardless of the car loan you get, make sure to get the right car insurance coverage. Both loans will likely require full coverage car insurance. That’s when the
Jerry
app can help.As a licensed broker, Jerry helps you find and compare quotes from over 50 top providers in minutes. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!
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- Gregory R.
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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.
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