Even with regular maintenance, your car will likely need to have parts repaired or replaced. If you don’t have an emergency fund to cover the cost of your insurance deductible, borrowing a loan to cover your car repair may be your only option. Before you commit to a lender, compare your financing options to find the one that will work best for you.
4 ways to pay for car repairs
Average processing time
Average loan amount
Average payback terms
Personal loans
1 to 2 business days
$1,000 to $20,000
3 to 5 years
Credit cards
Immediate
Varies
Varies
Mechanic financing
1 to 2 business days
Varies
Varies
Short-term loans
1 to 2 business days
$100 to $5,000
2 weeks to 1 year
Personal loans
For borrowers with good credit, a personal loan is likely the best option. Interest rates are capped at 36%, and there are multiple online lenders that process applications in just a few business days.
If you need less than $1,000 and you’re a member of a credit union, you may also want to look into a payday alternative loan (PAL). Rates are capped at 28% with terms up to six months — and you don’t need to have the best credit to qualify.
Credit cards
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 will generally be much lower than a payday loan.
Or if you’re looking to apply for a new card, you may want to compare cards with low introductory rates. This allows you to hold off on interest payments — sometimes for as long as 21 months.
Mechanic financing
Some mechanics partner with lenders to offer financing, while others offer financing through a branded credit card. These can often be used to pay for more than just repairs — like regular maintenance — which can help prevent future problems.
But before you apply, check your other options first. Rates are often more competitive when you go directly through a bank or credit union yourself instead of through your mechanic’s third-party lender.
Short-term loans
Short-term loans — payday, installment and auto title — are designed for borrowers with bad credit who need quick financing. While you can borrow a relatively wide range of amounts to cover a car repair, it will cost you. The APRs of short-term loans tend to be well over 300%. Because of this, consider your payday loan alternatives first to avoid getting caught in a cycle of debt.
What can I use a car repair loan for?
Use a loan for almost any car repair, including the cost of labor and parts. Some of the most common repairs are:
Blown transmission. An expensive repair, fixing a transmission can cost $4,000 or more.
Head gasket. Head gaskets are an essential part of a car’s engine, and repairing one will usually cost anywhere from $1,000 to $2,000.
Camshaft. The camshaft controls how much air enters your engine. Replacing it tends to be quite labor intensive — with costs running 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 of dollars to replace.
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.
Have a regular income, 18+ years old, be a U.S. citizen with a valid SSN, have an open bank account, meet any additional requirements your lender may have
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Not sure if you should repair your car or buy a new one? Here are a few situations that can help you decide.
When you might want to 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 only need a small amount. If the repairs aren’t too costly and you know you’ll be able to handle the extra monthly payment, repairing it might make the most sense.
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 and faster than buying a new car.
When you might want 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. Just have it inspected — you don’t want to sink money into repairing a different car.
Your car is damaged beyond repair. If you’ve been in a big accident or your car simply won’t run, it’s probably time to skip repairs and drive something new.
Using a loan or credit card can be a quick way to finance your car repair, but it may not be the cheapest. Here are a few tips to help you save money:
Call for estimates. 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.
Use your car insurance. Some car insurance policies will cover repair costs. You’ll likely still have to pay for parts and cover your deductible, but this can reduce costs and make fixing your car more affordable.
Ask about discounts and refurbished parts. 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 or if your repairs can be made with refurbished parts.
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 and request receipts for each payment you make.
Hire a pro-in-training. If your car has 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.
Ask friends and family. A friend or family member may be willing to lend you some money, often without charging interest. But like any loan, be sure to pay it back — otherwise, you could cause a strain in your relationship.
Once you’ve found a shop, stick with it. 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.
Must read: Buiding an emergency fund
Eventually, you’ll need your car repaired. Just like gas, you should set aside money for maintenance and repairs. A good rule of thumb is to have the full amount of your deductible stashed away in a savings account. To get started, consider downloading a savings app like Chime, which rounds up every purchase you make and adds the funds to a savings account.
Bottom line
Expensive car repairs can leave you stranded. But there are ways to cover the costs when you need a little extra cash for a repair. Compare personal loans before looking into your short-term loan options to help you find the best deal available to you.
Frequently asked questions
How do I get a loan with bad credit?
Some short-term loan options are designed to help people with poor credit get quick financing. Just keep in mind that it can get expensive — with APRs in the triple digits.
How do I find out how much my car is worth?
Online resources like Kelley Blue Book and Edmunds can help you figure out your car’s value. Or use our calculator to help you estimate the value of your car after an accident.
What repairs will my insurance cover after an accident?
It depends on your provider. If you have comprehensive and collision coverage, the answer is most likely yes. If you have basic insurance, you may not be covered. Contact your insurance provider to learn about your options.
Kellye Guinan is a freelance editor and writer, specializing in consumer lending. Her writing and analysis has been featured on Bankrate, MSN and MediaFeed. She holds degrees in anthropology and German language and literature from Middle Tennessee State University.
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