Need to repair your car but don’t have all the cash on hand? You have options.
Many of us rely on our cars to get to and from work and run errands. When your car breaks down, suddenly things become a little less convenient. If you don’t have a little extra money saved to cover the cost of repairs, then a bad situation becomes worse.
A traditional loan can take too long to process, costing you precious time and income. In this case, you might consider a different kind of loan to get your car repaired and back on the road. Our guide will explain the type of loans you could get and how you can use a loan to get over an expensive car repair.
How can I pay for an urgent car repair?
If you don’t have all the cash to pay for the repair, your next option is likely borrowing funds. Your credit plays a big role in if you’ll qualify for a loan. Poor credit can make getting a loan from a bank nearly impossible, but even if you have good credit, the time it takes to get approved and receive your funds can leave you stranded for weeks. That’s why short-term loans tend to be marketed for emergency expenses like a car repair. Here are four common ways to pay for an urgent car repair:
An option many people turn to is a a payday loan. This type of short-term loan could be a quick way to get the funding you need for a car repair. Because they’re marketed toward people with poor credit, you’ll find this is an expensive option. It should be reserved for use in a worst-case scenario when you need cash quick and understand the finance charges will be hefty.
Your credit card
If you have a credit card with an open credit limit, you could put the cost of a car repair on your card. Although you’ll be charged interest for the transaction, it’ll generally be much lower than a payday loan.
Personal loan or installment loan
If you have good credit, you could get a larger personal loan — just make sure you’re comfortable with the turnaround time. Some lenders may still consider you even with poor credit. A common option for those with poor credit is an installment loan. These loans are similar to payday loans in terms of quick funding and high interest rates, but give you a longer timeframe to repay what you owe — usually several months rather than weeks.
Help from family or friends
Finally, if you have friends or family you can trust, consider asking them for a loan. You may be surprised how willing people can be to get together and help you out in your time of need. Family and friends usually don’t charge interest on what they loan, as long as you pay back in a timely manner. Consider getting in contact with your loved ones and ask if they might be able to front you the money for this car repair.
How these four options stack up
Use the table below for help weighing the pros and cons of your car repair loan options.
|Avg. processing time||Avg. payback terms||Typical eligibility requirements|
|Payday loan||1–2 business days||2–4 weeks||Regular source of income, live in a state where payday loans are legal|
|Your credit card||Immediately||Varies||Must have an open credit account with an available limit|
|Installment loan||A few days to 2 weeks||3–6 months||Regular source of income|
|Help from friends or family||Varies||Varies||None, just be sure to pay back your debts|
Compare loans you can use for car repair costs
What can I use a car repair loan for?
You can use any of these loan options for any car repair, including labor costs and parts.
Some of the most common repairs are:
- Blown transmission. An expensive repair, repairing a transmission can cost $4,000 or more.
- Head gasket. Head gaskets are an essential part of a car’s engine, and repairing it will usually cost you anywhere between $1,000 to $2,000.
- Camshaft. The camshaft controls how much air enters your engine and replacing it tends to be quite labor-intensive. This repair will cost anywhere from $1,000 to $3,000.
- Fuel injector. The fuel injector delivers fuel to your engine and will cost around $1,000 to repair or replace.
- Car keys. It might not be a repair, but if you lose a key, it can cost hundreds if not thousands of dollars to replace a missing key.
It’s helpful to compare estimates from different mechanics first. Labor costs vary from shop to shop, so ask for discounts and make sure you’re being offered the best labor service price to save money.
One way to avoid these repairs is to take your vehicle in for regular maintenance. It might be costly to visit the mechanic when the check engine light comes on, but it will save you money in the long run.
Is it worth it to repair my car?
When you should repair your car
- You’re still making payments. If you’re still making payments on your car, repairing it can save you money — after all, paying down a loan is cheaper than paying for two cars at once.
- You can afford the loan. If the repairs aren’t too costly and you know you’ll be able to handle the extra monthly payment, a loan could be the right option.
- You need your car quickly. Buying a new car can take time. If you need your car to get around, opting for a couple days at the mechanic is cheaper than buying a new car.
Reasons to consider getting another car instead
- Your car isn’t worth it. When considering whether or not to opt for a repair, make sure the value of your car outweighs the repair. If not, consider buying a new car.
- You can get a better deal. You might find a car out there that costs less than the estimated cost of your repair. It may take some searching, but getting another car that costs less money than repairing your old car might be more preferable to you.
- Your car is damaged beyond repair. If you’ve been in a big accident or your car simply won’t run, then it’s probably time to invest in a new one.
Alternative ways to pay for a car repair
Using a loan or credit card can be a quick way to finance your car repair, but it may not be the cheapest. In order to get the best deal, consider some of these alternatives first. You never know what option could get you out of the mechanic’s shop and back onto the road without breaking the bank.
- Before you tow, call around. It’s tempting to have your car towed to the nearest shop, but unless the problem is urgent, you should call at least two or three shops and ask for estimates. This will help you find the best deal that matches good service with great prices.
- Request a payment plan. Some mechanics understand that you might not be able to afford an upfront payment. Ask if they have payment plans, but be sure to get your agreement in writing. This means you’ll have longer to pay for your repairs, and you won’t have to worry about the mechanic claiming you haven’t been paying down your debt.
- Use your car insurance. If you were involved in an accident, some car insurance policies will cover the labor costs of your repairs. You’ll likely still have to pay for parts, but this can reduce the costs and make fixing your car more affordable.
- Are there discounts? Some mechanics have discounts that can reduce the cost of your repair. When you’re asking for an estimate, be sure to ask if there are any discounts as well.
- Hire a pro-in-training. If your car is suffering from a normal problem but you don’t have the money to pay, consider calling a technical or vocational school. Teachers may be willing to check out your car, give their students a lesson and only make you pay for parts.
- Once you’ve found a shop, stick with it. This should go without saying, but your relationship with your mechanic is a crucial component of getting good service at reasonable prices. Find a shop you trust and visit it loyally. It will pay off.
It’s important to find positive customer experiences before you commit to a mechanic. Browse their reviews on popular reporting websites like Better Business Bureau and TrustPilot. These will give you a clear idea as to how your mechanic works, how much they cost and if they’re running a trustworthy business. However, keep in mind that many reviews are left when a person is very happy or very upset, so take each with a grain of salt.
Eventually, you’ll need your car repaired. This is an inevitable cost that all car owners should prepare for, but not everyone has the extra funds to easily build up an emergency fund. Similar to how you set aside money for gas, you can set aside money for a repair. A good rule of thumb is to have the full amount of your deductible stashed away in a savings account. You can start small by collecting change and slipping a few dollars in a week. This amount will quickly add up, and it can prevent you from having to take out a loan for car repair in the future.
Building an emergency fund
Eventually, you’ll need your car repaired. This is an inevitable cost that all car owners should prepare for, but not everyone has the extra funds to easily build up an emergency fund. Similar to how you set aside money for gas, you can set aside money for a repair.
A good rule of thumb is to have the full amount of your deductible stashed away in a savings account. You can start small by collecting change and slipping a few dollars in a week. This amount will quickly add up, and it can prevent you from having to take out a loan for car repair in the future.
It can be devastating to have your car break down and not be able to afford it, but there are loan options for you to consider to recoup the cost. Compare your offers and review all your options before making a commitment, and most importantly, don’t hesitate to ask for help when you need it.