Purchasing a car has always been a financial burden. It's not as simple as purchasing a chair, and the sheer cost often makes a prospective buyer think twice, if not thrice. A car is a serious, expensive acquisition, and few buyers would be foolhardy to part with their hard-earned money just to purchase a lemon.

That said, it's just as obvious that raising the funds to sufficiently buy a car isn't quite as easy these days. Have no fear, though. Even without cash, a prospective buyer can purchase the car of his dreams, thanks to the proliferation of car loan companies. These companies provide the customer with a means to finance his car purchase, using a car loan best suited to his needs and capability to pay.

Selecting the perfect car loan type, however, requires a bit of inside knowledge. There are several car loan types available and offered by a variety of loan and financing companies, and it's best that the customer be aware of these types prior to selecting his car loan. This will greatly lessen prospective problems that may arise when he finally decides to take the jump and purchase the car. After all, knowledge is, indeed, power.

So what types of car loans are available out there? These auto loans are differentiated according to the type of the car and its previous financing policy (if applicable). For example, loans for new cars and used cars will most definitely not be the same. Car loans also take the buyer's ability to pay into consideration, hence the probability of having fixed, variable and adjustable rate loans. As such, a buyer should keep in mind that loan offers from different companies should be compared carefully, lest they inadvertently compare apples with oranges (i.e. new car loans from Company A with used car loans from Company B).

Here are a few types of auto loans available out there:

1. New Car Loans. Obviously, this type of auto loan is for the purchase of new, fresh out of the box cars only.
2. Used Car Loans. These loans are for the purchase of second hand automobiles. The financing calculation for New and Used Car loans will always be different, so take care not to mix them up.
3. Refinancing. Let's say you're unhappy with your current car loan deal. There are financing companies out there willing to take up your current car loan and refinance it for a deal that suits you better. In short, you don't have to be stuck with a car loan company whose offer you no longer wish to pursue.
4. Bad Credit Car Loans. It's not true that people with bad credit cannot avail of car loans. In fact, there are financing programs specifically for buyers with poor credit scores.

Keep in mind that you can always find a car loan that's best for you, depending on the car you intend to purchase and your own payment details.