Key Takeaways
- Financing options for car repairs include personal loans, credit cards, mechanic payment plans, and buy now, pay later plans.
- Financing car repairs is a good option if the total repair cost is less than half of your vehicle’s value.
- Personal loans for car repairs offer fixed rates and predictable monthly payments, making them ideal for financing large, unexpected mechanic bills.
- Sun Loan provides auto repair installment loans up to $10,000 (depending on the state) with convenient, same-day approval decisions.
Let’s face it, there’s never a convenient time for car repairs. They’re usually unexpected, expensive, and never seem to be covered by your car’s warranty or insurance. Fortunately, financing can help you access the funds you need to quickly cover your expenses. Before financing a repair, get a written estimate and compare the Annual Percentage Rate (APR), fees, repayment term, and total amount you’ll repay. You may also want to weigh the cost of repairs against your car’s current value and the cost of replacing it.
If you’re stressed about unexpected or expensive mechanic bills, this guide will walk you through everything there is to know about financing for car repairs to help you get back on the road.
- Comparing Your Car Repair Financing Options
- 4 Ways to Finance Car Vehicle Repairs
- Is Financing Car Repairs a Good Idea?
- Alternatives to Car Repair Financing
- Financing for Car Repairs: FAQs
- How Sun Loan Can Help with Car Repair Financing
Comparing Your Car Repair Financing Options
Here’s a table that breaks down the different financing options for car repairs to help you find the right solution for your needs.
| Financing Option | APR Structure | Best For | Benefits | Considerations |
| Personal loan | Interest and possible fees; varies by lender and applicant | Major or unexpected repairs | Fixed interest rates, predictable repayment terms, large loan amounts, and can be used at any repair shop | Approval and APR depend on creditworthiness; origination fees may apply |
| Credit card | APR varies by card; promotional APR may be available | Small-to-medium repairs | Instant access to funds, 0% intro periods (depending on the card), and potential rewards | High interest rates, credit utilization impact, and carrying a balance can be expensive |
| Mechanic financing plans | Varies by financing provider | Repairs at specific shops | Convenient application and promotional financing is sometimes available | Limited to participating repair shops, and you have to pay significant interest if deferred-interest offers are not paid in full on time |
| Buy now, pay later (BNPL) | May be interest-free or charge interest/fees | Small, urgent repairs | Quick approval at checkout, installment payments, and some plans are free of interest | Short repayment terms, late fees or interest may apply, not all repair shops accept BNPL plans |
4 Ways to Finance Car Vehicle Repairs
There are several reliable car repair financing options available, so you can manage unexpected mechanic bills without draining your savings.
1. Take out a personal loan
When you apply and are approved for a personal loan, you receive the cash you need upfront to pay the mechanic for your car’s repairs. And the great thing about a personal loan is that you can repay the loan over time, which allows you to manage your budget effectively while addressing your car repair needs. With personal loans and auto repair loans up to $10,000 (amount varies by state) and same-day approval, Sun Loan makes it easy for you to move past car troubles and get back on the road.
2. Use a credit card
A credit card can be a reliable option for emergency expenses like car repairs. Simply pay with your credit card, then pay off the balance every month. Looking to use a brand new credit card for auto repair financing? When you apply, make sure you find one with a low Annual Percentage Rate (APR). The APR calculates what percentage of the principal you’ll pay each year by taking monthly payments and fees into account. The lower the APR on your credit card, the less money in interest and fees you’ll be charged for the unpaid balance on the credit card.
3. Check whether a mechanic offers a financing plan
Many mechanics and auto repair shops partner with outside lenders or credit card issuers to offer auto repair financing options or auto repair loans, often with interest-free promotional periods for qualified borrowers. While convenient, these financing plans usually have high interest rates. And, failing to pay the balance in full when the interest-free window ends means facing expensive deferred interest charges.
If you think you can pay the loan off during the short promotional period, you should be fine. If not, you might be better off using another method of payment.
4. Consider buy now, pay later apps
Buy now, pay later (BNPL) is a short-term financing option that lets you split the cost of your car repairs into smaller installments. You can often avoid interest completely, making it an affordable option for minor repairs. However, missing a payment or extending your BNPL plan can lead to fees or high interest rates.
Is Financing Car Repairs a Good Idea?
Financing a car repair may be a good idea if the repair costs less than the total value of the car and when you depend on it for daily driving. However, it isn’t the best idea when repairs cost more than the car is worth. As a general guideline, if the repairs cost more than half of your car’s current market value, you may want to consider replacing it instead of borrowing money to fix it.
Before you commit to a financing option, here are some tips to ensure you’re making the most informed decision possible:
- Get a written estimate for repairs. Always request a written estimate from the repair shop so you know the exact amount you need to borrow and avoid borrowing more than you need.
- Consider a second opinion. Take your written quote to another trusted mechanic to confirm that the repairs are necessary and pricing is fair.
- Compare the total cost of financing. Calculate the total cost of financing (total loan amount, interest, and fees) across lenders to ensure you’re getting the most affordable option.
Alternatives to Car Repair Financing
If car repair financing isn’t right for you, here are a few options:
Tap into your emergency fund
If you’ve been wise enough to stash a little bit of money here and there into an emergency fund, you’ll be glad you did when an emergency arises. Car repairs are usually an emergency, so you can put your emergency fund to good use. Even if you don’t have enough to cover the entire expense, putting some money toward your auto repairs can significantly lower the amount you wind up owing.
Visit a local nonprofit with an assistance program
Many local–and even national–nonprofit organizations offer programs that can help you finance your car repair emergency. Some local charities may be able to help you with free or reduced-price car repairs in your area. The government also offers a free car repair program to those in need. Check with nonprofits in your area to see whether they provide assistance with car repair expenses.
Double-check if your car is under warranty
A car warranty is a contract between the vehicle manufacturer or dealer and the car owner, providing coverage for certain repairs or parts of the vehicle for a specified period of time. Warranties can be tricky–if you purchased your car new, it is/was likely under warranty for anywhere between three and 10 years (depending on the manufacturer). However, warranties usually only cover certain repairs or parts of the vehicle–and some parts/repairs may be covered for less time than others.
Also, if you purchased a used car, there may be some of the original warranty left (or perhaps there was a new warranty provided by the seller). In any case, make sure to check whether your car is still under warranty by contacting the dealership where you purchased your vehicle. It’s always smart to read the warranty’s fine print, just to make sure the repairs you need are covered.
Borrow from family or friends
Generous family members or friends may have the funds to lend you for emergency car repairs–in most cases, all you need to do is just ask. Just be sure to clarify whether this is a loan or gift; if it’s a loan, make firm plans to pay the money back so as not to cause any fights with friends or family feuds.
Financing for Car Repairs: FAQs
How can I pay for car repairs when I have no money up front?
You can pay for car repairs when you have no money up front by using a personal loan, credit card, mechanic financing plan, or BNPL plan. These options let you spread the cost of repairs over time.
Does financing car repairs affect your credit score?
In most cases, financing car repairs will temporarily affect your credit score, specifically when a hard inquiry is involved. However, consistently making on-time payments can improve your credit score in the long run.
Are personal loans or credit cards better for auto repairs?
Personal loans are typically better for major and unexpected auto repairs because they offer fixed repayment schedules and affordable interest rates. Credit cards can be a good option for minor repairs, especially if you pay off the balance immediately and can avoid interest from accumulating.
Can I get car repair financing if I have bad credit?
Yes, you can get car repair financing if you have bad credit through options like co-signed personal loans, mechanic financing plans, and BNPL plans that use real-time bank data. While creditworthiness is important, many lenders also look at income and employment stability to make an approval decision.
Can I finance a car repair without paying money upfront?
Yes, you can finance a car repair without paying money upfront by using a personal loan, shop-specific financing, a BNPL plan, or a credit card. Keep in mind that these financing options may still charge interest and fees.
What credit score do I need for car repair financing?
The credit score you need for car repair financing will depend on the lender and its borrowing requirements. Each lender has different rules, so it’s a good idea to compare your options and check their requirements before applying. According to the Consumer Financial Protection Bureau, a higher credit score may make it easier to qualify for a loan and a lower interest rate.
Can I get a personal loan for an emergency car repair?
Yes, you can use a personal loan to pay for emergency car repairs and other car-related costs, such as towing and replacement parts. After you’re approved for the loan, the lender will provide a lump-sum payment you can use to cover the bill. Then, you’ll repay the loan in fixed monthly installments.
How Sun Loan Can Help with Car Repair Financing
There are plenty of options available when it comes to financing auto repairs, whether you decide to dip into your emergency savings, use a credit card, ask for assistance, or take out a personal loan. With an auto repair loan from Sun Loan, you can receive up to $10,000 (amount varies by state) to pay for your repairs. And because our personal installment loans do not have any limits attached as far as how you use the money, they’re perfect for not only unexpected auto repairs but also for preventative maintenance and even for paying off your auto loan.
Apply online, stop by one of our local branches, or call (800) SUN-LOAN for more information on our loan options. Financing your car repairs may be easier than you think!
