Why Finance Your Car Repairs?
Taking a vehicle that needs repairs to the auto shop is probably one of the most hated errands that exist and we don’t blame anyone for feeling this way. Having a working vehicle is great, but forking over thousands of your hard earned cash to pay for it, not so great. So what happens when your car breaks down in the middle of the road days before your next paycheque and your emergency fund for situations like this was drained earlier that month? Well first get out of the road, then get your car to the nearest repair shop and then consider financing the cost of the repairs.
Car problems happen and they usually happen at the most inconvenient time possible, typically when you have zero extra cash to pay for it. If you’re currently dealing with this kind of a situation, stop stressing, you have options. Keep reading to learn why financing your car repairs might be the answer you’ve been looking for.
How Will It Work?
Financing your car repairs means that you won’t have to make one large payment to your mechanic; this is a great option for people who do not have a lot of liquid cash available them or for repairs that cost in the thousands. Once you’ve been approved for financing, your repair shop will be paid in full and then you’ll make affordable monthly payments until you’ve paid off the cost of the repairs.
Some auto shops offer their own financing programs or partner with a loan company who will provide financing and sometimes you’ll have to seek financing from an outside lender. Whatever option you choose is up to you and the repair shop you’re working with.
Check out this infographic to learn more about auto financing.
Are There Any Qualifications?
As with any type of loan, there are a few qualifications that must be met in order to be approved for auto repair financing. Depending on what lender you work with there might be some variation in the requirements but you should be prepared to meet the following:
- The amount you request cannot exceed $7,500
- The amount you request cannot exceed the value of the car
- You must be employed for a minimum of 6 months
- You must have a bank account that has been active for at least 3 months
More often than not someone looking to finance their car repairs will meet all of these requirements so don’t let them deter you from applying.
What Will My Financing Cover?
Most financing will cover just about any repair that your car needs, as long as is fit into all of the above requirements. Depending on the cost and severity of your repairs, financing should cover any of the following issues:
- Breaks that need to be fixed or replaced
- Broken suspension that needs to be repaired or replaced
- Faulty exhaust
- New tires, both winter, and summer
- An engine that needs replacing
- The repair of an unreliable transmission
- Broken lights
- Cosmetic repairs (new paint job etc.)
Take a look at this infographic to compare new and used cars.
Choose Financing over Your Credit Cards
It can be tempting to use your credit card to pay for an emergency car repair especially if you’re in a rush and need your car to be in working order right away. For a small repair that costs $100 or less, your credit card might be an ok option but for larger repairs that cost hundreds or thousands of dollars, using your credit card could double or triple the cost of the repair in the long run.
The high-interest rates associated with credit cards make charging expensive car repairs one of the worst financial decisions you can make. When you charge an unexpected expense it’s often because you can’t afford to pay for it with cash, this means that you then probably won’t be able to pay off your credit card bill in full when it arrives. This will only lead to making the minimum payment required and incurring interest month after month until the cost of your repair has increased significantly.
Is Financing Right for You?
Are you worried about the cost of fixing a reoccurring problem your car is currently having? Did your car just break down and you have no cash to cover the cost? If you’re currently dealing with any car issues and don’t know where the money is going to come from financing is probably the right option for you. Loans Canada can help match you with the right car repair financing for your needs, fill out an application today!