Car repairs can set you back hundreds or even thousands of dollars, seriously damaging your cash flow and savings. Your first defense against these occurrences is to have the right car insurance.
You will find several providers all over the country. To pick the best one for your situation, you have to read reviews. Doing so will give you a good insight about the company, what they have to offer, and the general experience of other people in dealing with them.
CarShield reviews, for example, show you what to expect in terms of cost, coverage, how it works, its reputation, and other information from frequently asked questions. What you gather from this can play a huge role in finding a good auto insurance deal.
Car insurance is not a guarantee, though. Depending on the plan, it may not cover specific repairs in certain situations.
If you find yourself with a huge auto repair bill not covered by your insurance, do not fret. You still have a few other options.
Pay Using a Credit Card
Major auto repair shops would accept credit card payments for their services. If that is available, you can use one or several cards to pay for the repairs.
Be wary, though. Maxing out your credit card without the ability to pay it off quickly can cost you a lot of money from interest payments.
You can apply for a credit card specifically for car repairs as a safety net. Shop around to get one with a low annual percentage rate. At the very least, the card should offer rewards that could be useful for you.
Once you have a credit card specifically for auto repairs, avoid the temptation of using it for other things. Keep it separate so that it does not meddle with your regular finances.
Make Payments to Your Mechanic
Some mechanics will allow you to pay on an installment basis. That can be done through your credit card. If you know the mechanic, they may give you an option to do it in person.
Some mechanics even have their financing options through their partner lender. Their offer is usually interest-free financing for a fixed period. That gives you time to pay off the debt without additional burden. If not, the rate may be higher than what you are used to. So, there is a risk-to-reward ratio at work there.
Read the fine print when going for mechanic financing. Be especially wary of an option allowing them to keep the car in their garage if you default on your payments.
The mechanic financing mentioned earlier is essentially a personal loan made more convenient by involving less hassle in paperwork and approval. Technically, you can find one yourself.
Shop around for loan providers around your area. Provide them with the information they need to get a free estimate and pre-approval. Once you have a couple of quotes, compare them with each other. What are the pros and cons? Which company can offer you the right loan matching your needs?
Reading reviews can also help with your decision—or ask someone you know who already did this.
Dip Into Your Emergency Funds
The smart thing to do is to put away a percentage of your earnings into an emergency fund especially earmarked for these situations. A major car repair not covered by your insurance is an emergency.
Even if the fund cannot cover the bill in full, it can make things more manageable. If the fund can cover about half the cost, you can loan the remainder or ask for some help.
Borrow From Family or Friends
While it can be uncomfortable, borrowing from family or friends can be the most financially practical approach to your auto repair woes. Borrowing from a friend would not charge you interest rates as would banks and lenders. There is no approval process, and it will not affect your credit score.
On a personal basis, though, it can affect your relationships. A loan can strain a friendship, especially if you have a difficult time making payments.
But it never hurts to ask for help. We all need it from time to time.
Local Non-profit Groups
If you find yourself in a tight spot, you may find non-profit groups that aim to help people in your exact situation. Of course, you will need to meet the criteria to be eligible for their programs. Again, it never hurts to check.
Once back on your feet, you can give to the organization later.
Emergency car repairs can happen to anyone. Vehicles are complex machines, so something may go wrong at any given time. That does not mean you cannot do anything to reduce the risk.
Give your car a regular wash and checkup. Read the user manual to get an idea of how to maintain the vehicle yourself. That way, you can find potential issues early on.