Key highlights
- Secured finance uses the vehicle as loan security
- Secured typically offers more competitive terms
- Unsecured can suit older vehicles or specific circumstances
- The better fit depends on the vehicle and situation
- Both weighed across a panel of 80+ lenders
Business car finance usually comes secured or unsecured, and the difference affects your rate, your risk, and what a lender will offer. Knowing how each works helps you choose well.
What is secured car finance?
Here the vehicle itself is the security for the loan. Because the lender has an asset to fall back on, secured finance typically offers more competitive, potentially lower indicative rates. It is the most common structure for business vehicle purchases.
What is unsecured car finance?
An unsecured loan is not tied to the vehicle. It can suit older vehicles a lender won't take as security, or borrowers who prefer not to have the asset encumbered. The trade-off is usually a higher rate, reflecting the added risk to the lender.
Secured or unsecured: which is better?
For a newer vehicle in good order, secured finance is often the value option. For unusual assets or specific circumstances, unsecured may be the practical route. Availability of either is subject to lender criteria and your profile.
Simon Kendrick can weigh both across a panel of 80+ lenders and recommend the better fit. Request an obligation-free Overdrive quote. It is a soft check that won't affect your credit score.
Ready to compare cheap rates?
Free quote in minutes, decisions in 24–48 hours. No credit-score impact to enquire.