Paying for Car Repairs When You’re Strapped for Cash
One way to get by when you are looking at car repair needs but have low funds is to finance it. Some of the strategies include
Personal Loans
One of the options on hand is to avail a personal loan. They generally have fixed monthly payments and are paid off over a manageable period of time. You will get your money quickly, and in some cases, the same day — something that is essential for timely repairs. Online lenders typically offer competitive APRs and more flexible terms than traditional banks, which have helped them gain popularity among many borrowers12.
Auto Repair Loans
Auto repair loans — as the name suggests, are special loans for car maintenance costs. Typically, these loans run from a couple of hundred to several thousand dollars — generally enough to cover most problems — depending on the amount needed to repair the problem and your credit standing. They often feature lower interest rates than a standard personal loan, particularly if you have good credit34.
Family and Friends
Look for alternative funding source — consider asking family or friends if a personal loan will work in any case the formal lending is not an option. This can provide better terms than you would get from your typical lender, like no interest or more lenient repayment dates. That being said, it is important to proactively manage the repayment expectations at your startup and communicate clearly about these to avoid putting unnecessary strain on relationships5.
Car Repair Insurance
Check your insurance policy for any coverage that it may provide for accident or weather-related repairs. A well-maintained car will cost less to insure, while most policies do not cover for routine maintenance, some plans may have coverage provisions for certain types of damage that could save you money24.
Credit Card Financing
A credit card allows you instant funds to make a repair If you can pay off the balance quickly, a few credit cards offer promotional periods with low or zero interest rates But watch out for their high interest rates, which often take effect after the promotional period is over.35
Negotiate with Mechanics
If you want to share with us about your financial situation, do not be afraid to make a mechanic. If they know you are in financial hardship, most will agree to payment plans or discounts. As common as it sounds, however great of a tip it is to make your own “in house mechanic” friend can produce long term savings46.
Stay Away from Predatory Lending Practices
Take care to pay attention to the details of each loan you look at. They may demand sky-high fees and interest rates that can lock borrowers into a cycle of debt. Always read the fine print and compare offers from several lenders before committing56.
