The secured reference in Secured Car Loans refers the security or guarantee of the loan. With this type of loan, the lender who is giving you the loan, uses the car you are buying as security against what you are borrowing. The vehicle is the security which is why this is a secured loan. If the borrower defaults or fails to make the scheduled repayments, the lender holds the right to repossess the automobile and sell it to recoup what is owed to them. While the lender has security over the car, the borrower has full use of the vehicle and is responsible for all costs such as insurance, registration, fuel, repairs and maintenance. Once all the payments have been made and the loan finalised, the lender releases the security.