Sooner or later just about all cars end up needing time in the workshop. It’s not always for preventative maintenance either, as unfortunate events can often take us unexpectedly. In such instances, where you’ve either had an accident or a mechanical fault, you’ll be facing the prospect of a potentially hefty repair bill from your mechanic. Not everyone has the necessary funds stored away for such emergency issues, in which case, is it wise to take out a loan for car repairs?
What’s the diagnosis?
In order to gauge whether financing might be an appropriate course of action, it’s important to understand the exact nature of the problem(s) with the vehicle. If the problem is relatively small and contained, then a trusted mechanic will usually be able to provide an indicative diagnosis and estimate for the repair work. On the other hand, if the problem is extensive, or somewhat vague and unquantifiable, then a second or third opinion wouldn’t go astray.
Mechanics have their own specific costs of doing business, while replacement parts will be based on your particular vehicle. Once you’ve formed an idea as to the overall state of affairs, you’ll have a clearer indication whether: the repair costs are manageable; or, you have time to save up; or, you require financial assistance in the form of a loan.
I need financial assistance, what are my options?
If you’ve established that paying the repair costs straight away is an unviable option, or that it’s impractical to save up, then you will have various forms of financing accessible. Usually, if the repair bill is in the thousands, you might consider a personal loan. This will give you sufficient time to pay back the money at a reasonable rate. Provided you are able to demonstrate your capacity to pay back the loan, it will be set at a modest interest rate.
The downside to this is that the financing application and receipt of funds might take longer than other options, including credit cards or short term loans. The disadvantage with these formats however, is their shorter payback periods and significantly higher costs. Credit cards for instance can be anywhere over 10 or even 20% in interest per annum, while short term loans may charge an establishment fee as much as 20% of the actual loan value.
To make sure that you provide as meaningful a comparison as possible, include all other ancillary costs and ongoing fees that could influence the total cost of the loan. You should also take into account your personal situation, as far as repayment flexibility. Consider also the impact of being without a car and what role it might have shaping your own livelihood. In some instances, being without a car could mean you’re unable to work, which could cost you more than you might spend in haste to repair the vehicle.
The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.