You might borrow money directly from a bank, finance company, or credit union.
In your loan, you agree to pay the amount financed, plus a finance charge, over a period of time.
Once you’re ready to buy a car from a dealer, you use this loan to pay for the car.
Is it better to get finance or a loan for a car?
In many cases, the interest rate you can get on an auto loan will be lower than what you can get on a personal loan. That’s because the auto loan is a secured loan (the vehicle is collateral) whereas the personal loan is unsecured. However, dealership financing can be the best deal in some specific situations.
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