All in all auto loans are fairly simple to understand. However, there is one thing which many people simply do not understand and that is ‘is the car really yours if you have an auto loan? The answer to this question generally is yes but it all depends upon which type of auto loan that you purchase.

How the Auto Loan Type Affects You

Most auto loans are basically where you purchase a loan from a company for the full car amount and you gradually pay the company back over time. In this instance the car is yours because although you still owe money for the auto loan, you do not actually owe anything on the car because you have bought it straight from the dealership or private buyer. However saying that, there are times when you may risk losing the car, but mainly that is if you mis quite a lot of repayments on the auto loan.

With an auto loan which you receive from a dealership however, usually you do not actually own the car until it is completely paid off. Basically a dealership auto loan usually consists of:

• Going into the dealership
• Choosing a car which you like
• Putting a 10-20% deposit down on the car
• Signing the papers for the monthly repayments
• Driving away with the car

You continue to pay the repayments monthly until the full debt is paid off. It is not until you actually finish paying off the full car price that you actually own the car. So it is quite different to the average auto loan in which you do own the car right from the start.

Although with the general auto loan you could still lose your car, it is still less likely than you would with a dealership auto loan. This is because whilst the loan company does have the power to take away your assets sometimes, usually it would take a lot of missed payments for them to take the car away.

Overall whether the car belongs to you or not all depends entirely upon the individual auto loan plan which you have taken out. You should always read through the terms and conditions thoroughly before you agree to anything and by doing so you will see exactly where you stand. So many times people just take out an auto loan without fully understanding it and they find out too late that it was not what they thought it would be. So do not make the same mistake and know exactly what you are letting yourself in for before you do agree to anything!