The inevitable expenses of car maintenance come with the price of owning a vehicle. So, if your car breaks down and you haven’t budgeted for repair costs, you might consider other types of funding to help cover the bill. Read on to explore some popular financing options for car repairs, from credit cards and payday loans to automotive maintenance plans.
Payday Loans
A payday loan may be one of the quickest solutions for urgent car repairs. Payday loans are relatively small, short-term loans that must be repaid in full within two to four weeks–typically by your next paycheck. Payday loans are easy to qualify for and may not require collateral or a credit check. And payday loans usually offer same-day cash. That means you can get back on the road as soon as possible. Keep in mind that these loans may include higher fees and interest.
Credit Cards
Another convenient payment method for emergency expenses, a credit card offers a revolving line of credit you can use, repay, and reuse as needed. With revolving debt, you’ll owe a minimum payment based on a percentage of your balance due at the end of each month’s billing cycle. But it’s important to remember that interest can add up quickly if you don’t pay your balance in full each month.
Depending on your credit score, some card issuers offer credit cards with a 0% promotional interest rate. A low-interest promotion can be an exceptionally beneficial resource when paying a repair bill. And if you pay your balance before the promotional period ends, you won’t owe any interest.
Personal Loans
A personal loan may be available from your bank, credit union, or an online lender if you have good credit. Unlike revolving credit, personal loans involve a set amount you can repay in fixed installments – plus fixed interest – over your repayment term. A personal loan generally offers more competitive interest rates than credit cards, an appealing feature if you’re tackling large car repairs. While a lower interest rate could save you money in the long run, personal loans rarely offer the 0% interest promotions that some credit cards do.
Repair Shop Payment Plans
Some repair shops may offer payment plans that allow you to pay off your car repairs over time. These payment plans are often in partnership with a lending institution or credit card company, which you can likely apply for with a store representative or online. Requirements may vary from business to business, so you’ll want to check the terms and conditions before signing up. An initial deposit may also be required.
Automotive Maintenance Plans
Another option could be planning for car repairs with an automotive maintenance plan, traditionally available when purchasing a newer car. These plans cover certain types of repairs and maintenance services at little to no additional cost. Some plans expire after a set number of months or miles, so be sure you understand the details.
The Bottom Line
While owning and maintaining a vehicle can be expensive, unexpected car repairs don’t have to break your budget. Whether you’re anticipating future maintenance or need your car fixed now, knowing your options can help you choose the right financing at the right time.
