VWB Blog Having an emergency fund is a good way to prepare for unexpected expenses, like a car repair when you’re driving. It’s never a good idea to carry no money in your car at all or attach an envelope or jar to your center console to collect spare change.
Instead, come up with another plan to pay for quick car repair services. Make sure you understand a mechanic’s bill for taxes and labor, and clear up any confusion before it comes time to pay.
Here are ways you can pay for emergency car repairs. Read on!
Explore Short-Term and High-Interest Loans
Exploring short-term and high-interest loans is one way to pay for emergency vehicle repairs. Many lenders are willing to provide emergency money quickly, even if your credit score is not the best.
Short-term loan options may include payday loans and fast cash advances from credit cards. High-interest loans include title loans and installment loans. With title loans, you pledge your vehicle’s title as collateral for the loan.
With installment loans, you borrow a lump sum that is to be paid back over some time, usually with a fixed monthly payment.
You can also check out Smarter Loans to get the best deal possible. Just make sure to explicitly understand the loan terms and the interest rate involved.
Tap Into Your Savings or Investments
If you need to pay for a car emergency repair and don’t have the funds available for emergency cash, there are options available. Tapping into your savings or investments can be a good choice depending on your situation.
First, assess your needs and decide how much you need to pay. Most financial advisors will recommend that you have an emergency fund of at least 3-6 months’ worth of expenses in savings as a cushioned buffer. If you have emergency savings available, you can tap into these funds to cover your car repairs.
Another option is to withdraw money from other investments, such as:
- stocks
- bonds
- mutual funds
Depending on the investment type, you may be able to access these without triggering any tax liability. Although it may feel alarming to dip into your savings or investments, it’s important to remember that these are there to provide you with financial security and stability.
Utilize Credit Card Rewards
If you are facing an emergency car repair expense, you may want to consider using credit card rewards as a payment option. Many credit cards offer rewards such as cashback or points that can be used to purchase items.
To use this method, you simply make your payment with a credit card and use the rewards to pay for the repair. This advantage allows for greater flexibility and cost savings, as you are not paying the full cost of the repair outright.
It also allows you to spread out the amount owed across several payments, eliminating the need to pay it all at once. This can help make the entire expense more manageable. Utilizing credit card rewards to pay for emergency car repairs is a great way to minimize your costs and stay on top of payments.
Take Advantage of Cash Back Apps
Many apps exist that will give you a percentage of your purchase back in the form of cash-back rewards. You can consider apps like the following:
- Rakuten
- Dosh
- Ibotta
It all offers cash-back rewards when you purchase through an affiliated retailer or merchant. Before making any purchase, check to see if the merchant you’re interested in is an affiliate of the app you’re using. Once you make the purchase, upload your receipt to the app to receive the cashback rewards.
With these cash-back rewards, you can pay for necessary car repairs. For example, if you purchase the part you need for your car, you may be able to get 10%, 15%, or even 20% of the purchase amount back in rewards.
Consider a Crowdfunding Option
Crowdfunding can be an excellent way to pay for emergency car repairs. It is an easy and efficient way to raise money from a large number of people.
You can create a fundraising page on many popular crowdfunding websites where you can then share your story and explain why you need the money for your car repairs. It is helpful to include an estimate of the cost of the repairs and any additional information on how the repairs have been planned and why they are necessary.
To maximize donations, you should also mention any rewards you are willing to offer and share the page with your friends and family. With this option, you can spread the word and make sure you can get the repairs needed for your car in a timely and cost-efficient manner.
Exploring Auto Insurance
It is important to check if the policy covers the service needed. For instance, if the vehicle is damaged due to a collision, the driver’s collision insurance will cover the repairs. But if the repairs are needed due to some kind of mechanical failure, the driver may need to look at their comprehensive and mechanical breakdown insurance (MBI).
People with low incomes should also look into whether they are eligible for government assistance to pay for the repairs. By thoroughly exploring what auto insurance benefits cover and examining available funding options, drivers can ensure they can pay for an emergency car repair.
Understanding Your Payment Options for Emergency Car Repairs
Emergency car repairs can be expensive, but with the right plan in place, you can ensure that your car is taken care of without breaking the bank. Think broadly about potential sources of funds, and be sure to budget and plan.
Most importantly, make sure you and your vehicle remain safe and that you get the repairs you need. So, if your car gets into an accident or if you experience another car issue, be sure to be prepared for emergency car repairs!
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