An auto lender is a financial institution or entity that provides loans to individuals or businesses to purchase a vehicle, whether new or used. These loans are typically secured by the vehicle itself, meaning the car serves as collateral for the loan. Auto lenders can range from banks, credit unions, and online lenders to specialized auto financing companies or car dealerships that offer in-house financing options.

The process of obtaining an auto loan usually starts with a borrower applying for financing. The lender evaluates the applicant’s creditworthiness, which includes reviewing their credit score, income, and debt-to-income ratio. The better the applicant's credit history, the more favorable the terms of the loan, such as a lower interest rate, may be. For those with poor credit, some auto lenders offer subprime loans, though these often come with higher interest rates to offset the risk.

Once approved, the borrower is given a loan offer, which includes the loan amount, interest rate, repayment terms, and monthly payment. Auto loans can have varying terms, typically ranging from 24 to 72 months, depending on the lender and the borrower’s preferences. Longer loan terms often result in lower monthly payments, but alternative auto lending  can lead to paying more in interest over the life of the loan.

The loan is repaid in monthly installments, and failure to make payments can result in the lender repossessing the vehicle. This is why it's important for borrowers to carefully assess their financial situation before committing to an auto loan.

Some auto lenders also provide additional services such as extended warranties, gap insurance, or protection plans that can be added to the loan. These can provide extra peace of mind but also increase the overall loan amount.

Overall, auto lenders play a key role in helping individuals and businesses secure financing for vehicle purchases. By offering various types of loan products, they make it easier for customers to afford the vehicle they need while providing the lender with collateral and a predictable repayment structure.