We're looking to buy a used car and wonder if there's any difference in rates and/or impact on your credit score to buying the car with cash and using it as collateral for a loan or getting a loan to purchase a car.
Generally speaking personal loans have higher rates than car loans. During fairly recent times, the market for car loans has become very competitive. A local credit union offers loans as low as 1.99% which is about half the prevailing mortgage rate. In comparison personal loans are typically in the 10-14% range.
Even if it made mathematical sense to do so, I doubt any bank would give you a personal loan secured by a car rather than car loan. Either the brain would not work that way; or, it would simply be against company policy.
These questions always interest me, why the desire to maximize credit score? There is no correlation between credit score and wealth. There is no reward for anything beyond a sufficiently high score to obtain the lowest rates which is attained by simply paying one's bills on time. One will always be limited by income when the amount able to borrow is calculated regardless of score.
I can understand wanting to maximize different aspects of personal finance such as income or investment return percentage, etc.. By why credit score? This is further complicated by a evolving algorithm. Attempts to game the score today, may not work in the future.