Tap to Read ➤

3 Situations Where a Personal Car Loan Can Help

In some situations, a personal loan is the best choice for buying a car.
Modern Times
Some people don’t realize they can either use a personal loan or an auto loan to finance a car.

Your choice should be based on your own needs and buying process. But there are certain situations where a personal loan just makes more sense.

You’re expecting your financial situation to change

While most people don’t take out a loan expecting to default, a changing financial situation could leave you uncertain. And if you default on your auto loan, you could lose your car.

But if you default on a personal car loan, it won’t be repossessed as collateral.

You’re not sure what car you want to buy

If you’re not sure what car you want to buy, it might be a good idea to take out a personal loan for the purchase.

This way, you’re free to shop around for what you want and make offers on several. You’ll have a little more leverage in negotiating because as far as the dealer is concerned, you’re paying cash.

You’re buying a much older or salvaged car

Getting a loan for a car that has over 100,000 miles or has a salvage title can be difficult with traditional auto lenders.

In this situation, a personal loan is your best bet. You can use it for whatever you want, including restoration work and accessories.
A personal loan may not be the right choice for everyone buying a car. But if you need a little more leeway with how you spend the money, it’s probably the best one for you.

With a personal loan, you’ll have more negotiating leverage and you can take out more than you need to cover extras.