This loans are specifically designed for the purchase of a vehicle. This vehicle is usually a new or used car but can also be a motorbike, motor home, caravan or boat. The vehicle will be used as security for the loan, meaning if you default the lender can sell the vehicle to recoup its losses. In return, you can enjoy low interest rates, usually around 5-10% p.a. There will be restrictions on the age and condition of the vehicle so check this before you apply.