back to articles | February 23, 2021 | Jack Bartner
Categories:   Tips & Insights For Car Buying    Auto Loans & Financing
Common auto repair costs and financing options
Owning and maintaining a car is a pricey task for any driver. Why? You may ask. Aside from everyday expenses like filling it with gas and taking it in for car washes, car’s are prone to needing special services and repairs throughout the course of the year. This can call for anywhere from 1000-1500 dollars per year on repairs, with or without a major incident occurring.
Owning and maintaining a car is a pricey task for any driver. Why? You may ask. Aside from everyday expenses like filling it with gas and taking it in for car washes, car’s are prone to needing special services and repairs throughout the course of the year. This can call for anywhere from 1000-1500 dollars per year on repairs, with or without a major incident occurring. The need for car repairs may pop up out of the blue and you may not always have a means to pay for the repairs. That’s why we’re going to go through all the possible financing options you have to consider if finances are a bit sparse this time around.
Before panicking and going out to seek a loan, make sure none of the repairs you require are covered with warranty or insurance. For example, if your repairs arised due to a car accident, then they may be covered by car insurance or your dealership may cover certain repairs if they fall within your warranty. If this becomes apparently ineffective, then move on to the next options.
Taking a personal loan from your bank may be one of the best choices for financing your car repairs if you don’t have an emergency fund at your disposal now. Typically, getting a loan comes with a lot of strings attached compared to paying for your repairs directly with cash. But unless you want to opt for taking other means of transportation until raising enough money for repairs, they are the next best option. Personal loans usually come at a lower interest rate than traditional loans and are worth looking into if you’re looking at car repairs with a high price tag.
Some mechanics or mobile auto repair providers offer the option of paying the costs of your car repairs over a period of time without any third-party financing. This may be established through subsequent, fixed payments for your total debt or may be included in a price plan offered by the mechanics of your choice. Depending on the service provider, the process may vary: some are quick to accept this form of payment while others may require a screening process before granting you this method of payment. Regardless, it is an effective way to handle your car repair financing in an efficient and quick manner that should be considered.
If your credit score doesn’t qualify you to receive a loan from the bank, you may want to consider seeking a private lender. This can be in the form of a private institution (not federally owned) that provides lending or from an individual. Private lenders can be anyone from a friend to a family member. Depending on the mutual agreement you settle on, your monthly payments, rates, and deadlines will vary. Some find this an effective way to get the necessary finances they seek without going through the hassle of applying for a loan through the bank.
Opting for charging your repairs to a credit card is yet another quick way to take care of financing your repairs. While this may seem like the go-to move, a lot of people may regret it afterwards if you don’t assess all the risks beforehand. This approach is recommended for repairs relatively lower in cost that can easily be paid off within a few months. For more major repair costs, this may not be the most effective route as interest rates are high and your debt may pile up if you’re unable to get on top of it.
While a sudden car repair emerging into your life is certainly an inconvenience, at least you know that there are several financing options that won’t leave you in a standstill if these types of situations arise. Keep in mind that careful observation and frequent maintenance can save you from car repairs appearing out of the blue. It’s optimal to allocate certain funds throughout the year on maintenance to abstain from emergency repairs costing anywhere from a couple hundred to thousands of dollars.