Can I Finance Auto Repair?

11 Nov
finance auto repair

Can I Finance Auto Repair?

You just received bad news from your mechanic. Your broken-down vehicle needs expensive repairs before it can hit the road. You have savings but do you tap into them to fix the car? They are for your kids’ college tuition and your retirement. You might not have to. DOC Auto explains how automobile repairs can be financed through different options.

Loans

You could take a loan out to finance your auto repairs but consider a few things first. One, is your vehicle worth the amount of money it will take to repair it? If not, you might be better off purchasing a new car, truck or SUV. Two, do you have room in your monthly budget for the loan payment? You will have to pay off the loan plus interest, so make sure you can afford the added debt. Three, do you have the credit to get a loan? If your credit is bad, getting a loan to finance might not be an option for you.

There are also several different loan types from which to choose. They include

  • Personal Loan: A personal loan is also called an installment loan because you pay the money back in monthly installments. You must have good credit to secure a personal loan or have a co-signer with good credit to accept responsibility should you default on your monthly payments.
  • Traditional Loan: A traditional loan is much like a personal loan with one added caveat: You must show you have collateral to back up the loan. It’s much like your car loan. The vehicle is the collateral that secures the loan and if you default, the lender can repossess your car as payment.
  • Payday Loan: Avoid a payday loan if you can. These come with interest rates as high as 400 percent or more. You literally pay back four times as much as you borrowed. Plus, payday loans are due in a short amount of time, usually by your next payday, which could really cut into your budget.
  • Car Title Loan: This is another no-no. Car title loans mean you borrow money against your vehicle title and pay it back plus interest up to 300 percent. You surrender your title to the lender until the loan is paid back, and you cannot secure this loan if you are still making car payments.

These are the loan options you have to finance auto repairs. The information above is general, however, and you should talk with your financial expert or bank to determine which option would be best for you.

Credit

If you don’t like the idea of a loan or fear you wouldn’t qualify for one, credit is another auto repair financing option. Pull out your credit card statements to see which one carries the lowest interest rate. Charge your auto repairs on the credit card with the lowest APR. You can also apply for a new credit card with a low introductory APR and use it solely for your auto repairs. Finally, some auto mechanics also offer credit for their qualifying customers.

DOC Auto is located in Fredericksburg, VA. Chatham Heights residents and Courthouse Road.

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Chatham Heights
175 Chatham Heights Road
Fredericksburg, VA 22405
(540) 899-3732

Courthouse Road
10734 Courthouse Road
Fredericksburg, VA 22408
(540) 710-0173

Monday – Friday:
8am to 6pm

Saturday:
8am to 2pm

Closed on Sunday