4 Financing Options to Repair a Car to Get Back on the Road

When your car needs repairs, it can throw off your whole routine—from commuting to work to handling everyday responsibilities. Getting those repairs done quickly is often important, but the cost can be a major hurdle. Depending on the issue and the vehicle type, repairs may cost anywhere from a few hundred dollars to $20,000 or more.

The type of car you drive plays a big role in this situation. Electric and hybrid vehicles often require specialized parts and labor, which can make them more expensive to repair than gas-powered models.

If you don’t have enough savings to cover the repairs, here are four financing options to consider that can help you manage the cost and get back on the road.

1. Auto repair loans

An auto repair loan is a type of personal loan that’s specifically used to pay for vehicle repairs. Some lenders can provide funds the day you apply, while others may take a week to fund a loan. 

To qualify, you’ll need to meet certain requirements — though these can vary by lender. Many lenders look for a minimum credit score (with 670 or higher generally considered good), and may also evaluate your income, total debt, and the amount you’re borrowing.

Ultimately, lenders want to be confident that you can repay the loan.

2. Credit cards

Credit cards can be a quick option to pay for repairs, assuming you have a high enough credit limit. But there can be drawbacks, such as the high Annual Percentage Rate (APR) often associated with credit cards. A higher balance that gets rolled over from month to month also means a higher minimum monthly payment, which may or may not fit into your budget.

By considering using an existing card and avoiding applying for a new one you could speed up the process of getting to use a card. Best of all, if you can qualify for a 0% APR offer and pay off the balance before the 0% offer period ends, you can essentially finance the repairs with no interest. But keep in mind that 0% APR offers are most often for cash advances, not purchases. If you qualify for the cash advance offer you will probably pay a transaction fee which can be a flat amount or a percentage of the advanced amount. 

The introductory period for these offers typically last between six to 18 months. However, you should keep in mind that if you don’t pay off the balance before the offer period expires, your remaining balance will be subject to the regular, higher APR.

3. Mechanic financing

Some mechanics will partner with lenders to offer funding for car repairs. Depending on the mechanic, you may be able to access a payment plan for the necessary repairs. Some may even offer a limited-time 0% APR card.

Mechanic financing may be appealing at first glance, especially if you need your car fixed as soon as possible, but you may find that you have more favorable options elsewhere.

4. Family loans

It can be difficult to ask for financial help from family members. But if you’re having trouble qualifying for other options, getting assistance from a loved one may make sense. Setting expectations around the loan, including what happens if you miss a payment can help protect the relationship.

What to consider before applying for car repair financing

• Required funding amount: Some lenders may not offer a high enough loan amount to meet your needs. For example, if you have a classic Chevy Camaro, you might be looking at classic car loans rather than using credit cards.
• Your financial situation: Your credit score may dictate your options, so checking your score can help you narrow things down. Your income and existing debts can also help you zero in on a financing option that fits into your budget.
• Total cost of borrowing: Each financing option comes with its own rates and fees, and those will directly impact your long-term costs.
• Timeline: Some loan funds may take a few days to hit your account, which may be a deal breaker. The proposed repayment timeline, as well as how that impacts your monthly and long-term costs, can also shape your decision.

Car repair financing options to avoid

There are options to finance car repairs that are typically best avoided because of the high associated costs. Two such examples include:

• Payday loans: These short-term loans usually don’t require a credit check and may seem like a quick fix, especially if you need cash immediately. However, they are known to come with extremely high fees, often equivalent to a triple-digit annual percentage rate (APR). Loan amounts are typically small—often capped at $500—and repayment is due on your next payday. If you can’t repay the full amount on time, you may be charged additional fees or be forced to take out another payday loan, trapping you in a cycle of debt.
• Car title loans: These loans use your vehicle as collateral and also don’t usually require a credit check. Like payday loans, they’re short-term and come with high fees and interest rates. If you can’t repay the loan in full, the lender may roll over the balance into a new loan with more fees added. If you default, the lender has the legal right to repossess your car, which can leave you without transportation and in deeper financial trouble.

The bottom line

Car repairs can sometimes be too expensive to cover with savings alone. Fortunately, there are options that can help, whether that’s taking out a loan or getting a 0% APR offer from a credit card issuer. Once you cover this emergency cost, the next step is to start saving money for future repairs. That way, you won’t be caught off-guard the next time your car needs a little mechanical assistance.Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of theweeklydriver.com or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.