I’m trying to understand how auto notes are categorized. Specifically, are they considered secured debt because they’re tied to a vehicle, or are they classified as unsecured? Any clarification on the distinguishing factors would be appreciated.
Auto notes are typically secured debt. The lender takes your car as collateral, meaning if you default, they can repossess the vehicle. Even if the loan terms seem flexible, that lien on the car gives the lender significant leverage in a default situation. While a few niche financing products might have different structures, standard auto loans are secured. In practice, this added security for the lender often translates to better rates, assuming your credit qualifies. Otherwise, cash-strapped buyers might end up paying more for the financing when collateral is required.
Auto notes have evolved into a pretty standard example of secured debt. The vehicle itself acts as a cushion for the lender: if a borrower defaults, they’re looking at repossessing the car. That said, keep an eye on market trends—interest rates have been on a bit of a rollercoaster, and while this security generally allows for lower interest rates, there’s also an increased emphasis on the vehicle’s residual value and repo trends in some regions. I’ve noticed that lender strategies have slightly shifted with tighter regulations and a focus on more robust collateral appraisal processes, which can sometimes lead to more negotiating power for borrowers with good credit. In summary, while there are exceptions like alternative financing methods, the conventional auto note remains a secured debt instrument. 
I think the typical auto note is considered secured because your car itself acts as collateral. If you stop making payments, the lender can reclaim your vehicle, which is what gives them that security interest. I’ve seen some alternative financing options, like taking a personal loan to buy a car, but that’s a different product. In the usual case with an auto note, the vehicle is essentially the guarantee, so it falls under secured debt. That said, things can get a bit murky with less common lending structures, but for most people, it works like this.