Loans, whether for a car or anything else, can be either secured or unsecured. A secured loan is one where the lender has a legal right some piece of property, called collateral, if the borrower fails to pay on time. An unsecured loan is one where the lender is counting on the borrower to pay back, and if the borrower defaults the lender will have to attempt to collect. Almost all car loans are secured loans: the lender will hold legal title to the car until the loan is paid, at which time the title will transfer to the borrower.
There are a number of reasons why a secured car loan is the normal route for most borrowers. One major reason is the difference in interest rates between secured and unsecured loans. Lenders will almost always give better interest rates when a loan is backed by collateral. Partly this is because their security interest in the collateral makes default less likely. The threat of repossession makes people tend to pay secured loans first and unsecured debt second. Another reason why lenders give better rates for secured loans is that these debts are treated differently in the event of bankruptcy, usually being paid before the unsecured loans. The lender also knows that if worse comes to worst, by repossessing the collateral and selling it, they should be able to make back most of what is owed.
In addition to better rates, secured loans are the right choice for many car purchases because of limits that most lenders will place on the amount that they will lend unsecured to a single person. Even if you were willing to tolerate a higher interest rate, in many cases the lender would not want to loan the amount of money that is typically required for a car, especially a new car.
Nevertheless, there are some circumstances where an unsecured loan might be the right choice for some borrowers. For example, if you only need to borrow a small amount for the car, either because it is a very inexpensive car or because you are going to put a large down payment on it, you might able to get an unsecured loan. The interest rate will likely be higher. But if you expect that you will need that car for work and cannot risk the chance of repossession if you miss a few payments, then the assurance that you will not lose your source of livelihood might be worth the extra money in interest. Bankruptcy courts are full of people who were barely holding on until they lost their car, and then their job because they could not arrive to work sites reliably.
Secured car loans are the norm, and you can expect that it will be the easiest type of loan to get. The security interest that the bank has in the title to the car allows them more flexibility in the other terms on the loan, and gives the buyer more options. But for some people, under limited circumstances, an unsecured loan to buy a car might be the way to go.