“Well, I’ve got good news and bad news. Which do you want to hear first?”
No one ever wants to hear these words, especially from their car mechanic. But car maintenance and repair costs are unavoidable expenses. And unless you have a second vehicle in the home or can easily access public transportation, keeping your car in good operating shape isn’t optional. It’s a necessity and oftentimes an expensive one, especially if you’re not keeping up with routine maintenance.
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According to a survey by travel organization AAA, common auto repairs cost an average of $500 to $600, with other major repairs running upwards of $1,000 or more. And 1 in 3 drivers reported they would be unable to pay for an unexpected car repair.1 Even if the needed repairs are the result of a car accident and covered by your auto insurance, you still may be required to pay a deductible of $500 or more depending on your coverage.
So how do you pay for car repairs if you don’t have the money saved? First, look for ways to save money on your repairs. Shop around and take the first quote your mechanic gives you to another repair shop for a second opinion. You may find a better deal elsewhere. You can also try negotiating a lower price with the mechanic or asking if they’re running any specials. It can’t hurt to ask!
Even if you succeed in getting a lower estimate, you may still need options for paying for car repairs. Here are 6 ways to pay for car repairs with no money:
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Personal loanUsing a personal loan to pay for car repairs allows you to pay the mechanic right away and spread your payments out over time. If you’re considering applying for a personal loan, choose a lender that can get your money to you fast — as soon as the same day, even — so you can get back on the road as soon as possible.
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Mechanic financingSome mechanics partner with lenders to offer their own financing option. It could be a branded store credit card or a car repair payment plan in the form of a personal loan from its lending partner. You may be offered interest-free financing for a period of months, which is great if you pay off the loan or credit card before the introductory period expires. But if you take longer to pay it off, your “go-to” rate may be substantially higher and you will be required to pay the interest that has accrued since the original date of the loan.
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Credit cardsCan you pay for car repairs with a credit card? Yes, the majority of car repair shops accept credit cards for auto repairs. If you have the available credit, you could use a credit card or a combination of cards to pay for the repairs. But maxing out your credit card(s) without the means to pay the balance off quickly is not a good idea. If you’re thinking about opening a new credit card for car repairs, look for one with a lower APR, or that offers rewards, and avoid the temptation to use the card for more than just the auto repairs.
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Emergency fundOf course, if you happen to have emergency savings set aside, a major car repair qualifies as one of those situations where it’s necessary to dip into your savings. Even if you don’t have enough to cover the mechanic’s bill in full, you may be able to lower the amount financed if you can pay even a portion of the total in cash. Every little bit helps when you need to pay for car repairs.
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Borrow from friends or familyBecause asking a friend or family member for money can be so uncomfortable, most of us see this as a last resort. But if there’s someone close to you who can help bridge the gap between how much you have and how much you need for car repairs, their helping hand could be just what you need to get through this financial emergency. Just remember to be clear about whether the money is a gift or a loan. If it’s a loan, put the repayment details in writing, or otherwise risk putting a strain on the relationship.
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Check with local nonprofitsIf you meet certain need-based criteria, some nonprofits like United Way, as well as local churches and faith-based and community organizations, may offer programs that could help — or they may be able to recommend other solutions.
In addition to knowing your financing options, you may have other questions as you consider all of your alternatives, including:
Is it cheaper to buy another car?
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If the cost of your needed repairs is worth more than the car itself, it’s worth considering whether purchasing a reasonably priced car makes more sense. If this is the case, our free 5-minute online course can help you understand the car loan process, know your options and find the best car loan for your budget.
Do you pay before or after a car repair?
Be skeptical of any mechanic or auto repair shop that asks for upfront payment before making repairs. This isn’t common practice. (The only exception may be if an expensive part needs to be special ordered.) Only after the shop has given you an estimate, you approve it, then the shop completes the repairs and payment is due. And most likely, it’s due in full.
How can I avoid this in the future?
To help prevent too many expensive trips to the mechanic, be sure to keep up with your scheduled maintenance services like oil changes and tune-ups to detect small problems before they turn into bigger ones. You’d be surprised at how much routine car maintenance can save you in the long run.
When you’re faced with paying for car repairs with no money, know that there are financing options available. The key is doing your research and finding the one that helps you out of this emergency without putting you into another one later.
1. https://www.aaa.com/autorepair/articles/planning-for-auto-maintenance-and-repair-costs
Source: https://tholansonnha.com
Category: Finance
