[toddmatthews]

> Call your bank and ask them what the interest would be for a line of credit equivalent to the loan amount for that car, over the same period

an unsecured line of credit is going to have a higher interest rate than loan backed by the collateral of the car.

also, people tend not to default on their primary vehicle (they need it to get around) so its a less risky loan, hence the lower interest rate

[hoffspot]

I would have 1000% agreed with you except I had a very different experience last year. I was out seeking loans for a car and shopping around for low interest. One of the lower ones was from a company branded LightStream but on the back end is really SunTrust/Truist. They had a great rate, no origination fees, and weirdly, asked specifically not to set the loan up so that the car was collateral. Maybe it was a credit rating thing (mine is quite good) and they would incur more costs setting it up that way.

[kazinator]

> an unsecured line of credit is going to have a higher interest rate than loan backed by the collateral of the car.

That depends on who you are and what you have, from the bank's POV. If they are actively bugging you to take out this kind of loan, then they probably don't have an issue regarding collateral.

A car is not particularly good collateral; it depreciates rapidly, subject to being damaged and stolen.

[sonotathrowaway]

Houses make good collateral. You can’t pick up a house and move it to hide it from the repo man.