We all do our best to save up for little emergencies here and there – but sometimes no amount of diligence or rainy-day funds can prepare you for the unexpected cost of a car repair. With the cost of running a vehicle surpassing a quarter of weekly expenditure for poorer families in 2019, this is not an isolated issue – nor is it one without its workable solutions. So, how best to finance an unexpected car repair?
a). Borrowing from Family
Always a difficult solution, but swallowing your pride and asking for assistance from your family should always be your first port of call, in the event of having no money for an urgent repair. Money from a loved one is generally interest-free and not bound by any contracts, unlike money from other sources – so before you go down the route of researching financing or loans, be sure to try this first.
b). Bad Credit Loans
In the event that your credit history qualifies as “poor” to most lenders, you might be struggling to clear a loan full stop, let lone for your car. However, you can both rebuild your credit and finance your repair using bad credit loans. These are generally loans from lenders happy to ‘risk’ lending money to you, in return for securing it against your property. Prompt repayment on their terms saves you the headache of inflated interest rates, and has the added bonus of improving your credit score.
c). Credit Cards
You might be tempted to use a credit card to pay for your car’s repair – and this is not a bad idea in theory. In practice, you want to make sure you aren’t using a high-interest credit card, and that you fully understand your card’s terms – late repayments can balloon in cost quickly, and ruin your credit score in the process. The solution is to apply for a 0% interest credit card, and save yourself the headache of paying more than you expected for fixing your vehicle.
d). Mechanic Financing
Many mechanics and car repair services offer financing programs for car repairs; if you find yourself in a tough spot, with an urgent repair required and no time to apply for a loan or credit card, you can instead agree to pay your mechanic in installments, and get your car fixed just a quickly. The catch is that many of these services add interest, meaning you may be liable to spend more than the cost of repair – but in an emergency, and when your funds are too low to cover the entire cost, a small sum each month isn’t so bad.