No, there are three main types in the UK: the personal loan, Hire Purchase (HP) and manufacturer's finance.

A personal loan from a bank or other financial institution generally means paying a lower rate of interest and getting the freedom to shop around. You may miss out on some car-related benefits offered through a dealer's finance scheme. But, on the other hand, having ready cash gives the buyer a powerful negotiating position on the forecourt.

Dealerships offer Hire Purchase on all new and some used cars and with this type of car loan the buyer is essentially hiring the car from the dealer until the final instalment has been paid two or three years down the road. During the loan period the buyer does not legally own the vehicle, it remains the property of the Hire Purchase company until the loan is settled in full.

Manufacturers also operate their own finance schemes directly or through their network of franchised dealers. With competition in the new car market at its most fierce for years, manufacturers now offer a number of years interest free on their car loans.