: These are the most common. The vehicle serves as collateral , which generally results in lower interest rates. However, the lender can repossess the car if you default on payments.

: These do not require collateral, meaning your car is safe from repossession, but they typically carry higher interest rates and require a strong credit history. Direct vs. Indirect Financing :

Comparing Bank Car Loans vs Dealer Financing - Better Money Habits

The good news is that you have options: You can get your car loan from a bank or credit union, or you could go through the dealer. Better Money Habits

: You apply directly to a bank or credit union . This often offers more transparency and potentially lower rates.