Ever wondered what the difference is between secured car loans and personal unsecured car loans and how that difference affects your finance and their repayments.   The car loans terms can be only minor, but is larger when the true cost of each is taken into account. Before discussing secured and unsecured car loans in more detail, let’s first have a look at the various workings that determine the cost of your loan and of your monthly repayments. The cost of the car finance package is the total you repay less the loan amount borrowed. Hence, let’s say you are repaying $20,000 at 12% interest rate over 36 months; you will repay at the rate of $664. 29 per month.   That would total a repayment of $23,914. 44, and the cost of the loan would be $3,914. 44 plus any set-up or administration fees.   A car finance calculator will enable you to work this out for yourself. An substitute to a car finance would be car hire purchase (HP), where you hire the car over the repayment period and get the title to the motor car with your final payment. Until then the car belongs to the HP company. However, most finances are either secured or unsecured, and not all finance companies offer unsecured or personal loans so let’s look at secured car finance first. Secured car loans is one whereby the lender offers the loan with the car as security.   If you fail to make payments, the lender can sell the car to recoup their money.   It is possible to get a secured car loan when the motor vehicle gets past a certain age, often 7 years, but the car finance term or loan term may be requested to be shorter than the standard 5 yearsor not at all by using your home or some other form of security.