hands exchanging money for car repairs

Financing Auto Repairs: How to Pay for Repairs If You’re Strapped for Cash

Having an emergency when you’re strapped for cash is an awful burden. It makes a bad situation worse and elevates your stress levels. 

Putting aside extra cash to cover emergencies isn’t always an option. Some Americans are unable to budget for additional expenses, so they neglect preventive care on homes, cars, and even their health.

When an emergency arises, they deal with it the best way they can. This can backfire and leave them in a bigger bind. Trying to recover from an unexpected major expense is bound to cause a domino effect.

Imagine living from paycheck to paycheck – and your only means of transportation breaks down. We have no control over unexpected expenses, but it doesn’t hurt to know the options, just in case that rainy day comes. 

Continue reading to learn how financing auto repairs can help if you’re strapped for cash.

Try to Borrow Money from a Friend or Family Member 

Family and friends are often a good source when an emergency arises. Explain your situation and lay out a repayment plan. Money has a way of ruining relationships, so pay it back as promised. 

The loan doesn’t have to be in the form of cash. If they have a credit card for car repairs, it could make paying the money back easier. Offer to pay the monthly bill until your portion of the balance plus interest is repaid.

If your employer is offering overtime, take advantage. The sooner you can repay the money, the better.

Ask Your Employer for a Pay Advance

Many employers will allow employees to take a pay advance in case of an emergency. The advance will come out of your next paycheck. If you’re lucky, you may be able to divide the repayment over two or three pay periods.

The good thing is, you’ll be able to get your car repaired. The downside, if you’re already struggling, having a smaller paycheck or two can put you behind on other obligations. Employers will limit how many times you can use this benefit.

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ln the meantime, look for other opportunities to make extra cash. Take on an extra shift, have a yard sale, or sign up with Lyft or Uber.

Use Credit Card Balances

Having credit cards with a balance comes in handy when you’re faced with an emergency. It’s actually a good idea to have a rainy day credit card that you only use for emergency situations. 

Most credit card merchants allow for cash advances. On average, you can withdraw up to the full balance on each card. The advances will come with extra fees, but you’ll have the money to get your car fixed.

Commit to repaying the balances as soon as possible to save in interest.

Get a Payment Plan from the Car Repair Shop

Automotive car repair payment plans are often available through the repair shop. Some shops may not advertise this option because they would prefer to receive payment up front. Don’t hesitate to ask if the option is available.

You will need to complete a credit application. Proof of income and a credit check are required to determine creditworthiness. Sometimes, the funding is through a third party program, so if you’re declined, don’t take it out on your repairman. 

If financing is not available by your repair shop, ask if they’ll be willing to set up a payment plane. Or will they accept a post-dated check? 

A car that is paid for can be used as collateral. Repairmen are not in the dealership business but may accept your car title to secure payment for services. If your car has resale value, they’ll be more open to the arrangement.

Take Out a Payday Loan for Financing Auto Repairs

Payday loans once carried a negative stigma. After years of helping individuals in a financial bind, they are becoming an acceptable means to an end. People of various income levels use them to handle financial emergencies.

There are no credit checks. All you need to apply is a job and a bank account. The repayment will be automatically drafted from your bank account on your next pay date.

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Payday loans come with high interest rates, so make sure you can afford to repay on the due date.

Extending the terms of the loan is possible, but it will cost you more money.

Title Loans Are a Good Solution

Actual auto repair loans are hard to come by. Having a vehicle that is paid for and less than 10 years old will get you a car title loan. This will give you the money you need and offer a longer repayment period.

The risk in using the title to your car is that the failure to repay the loan will lead to repossession. You may also find yourself in an embarrassing situation if the title company uses a tracking device. In this instance, the car is disabled when payments are late.

The upside to financing auto repairs with a title loan is a fast approval process and immediate disbursement of funds.

Get a Personal Loan

The repair expenses may exceed the amount you can get from a payday loan or a title loan. Based on your current obligation, you may need a longer repayment period. Taking out a personal loan gives you the flexibility you need.

Bonsai Financial puts you in contact with lenders that offer personal loans with no credit check and no collateral requirements. In some instances, you can borrow up to $5,000. All you need is a bank account and verifiable employment income.

Your funds are deposited directly into your bank account.

You May Need a New Car

If your car is in the shop more than it is on the road, it may be time to buy a new one. Dumping money into financing auto repairs is a waste of resources. Now is the time to pay down debt and improve your credit score.

A new car doesn’t necessarily mean brand new. Click here for tips on what to look for when shopping for a used vehicle!