Financing A Car Repair: What If Insurance Won't Cover It?

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Financing A Car Repair: What If Insurance Won't Cover It?

15 May 2019
 Categories: , Blog


If insurance won't cover your car repair, you may find yourself having to finance it instead. This is common if you have a high deductible: if your deductible is $2,000 and you have a $1,500 repair, you may not want to pay it out of pocket. There are a few options that you have for financing, and you may want to explore them all before making a decision.

Financing through a Repair Shop

Most repair shops will not directly finance your repairs, but they will connect you to a lender who will. The downside to this is that these loans are usually quite costly, and if you don't have a good credit score, you may need a co-signer for the loan. Financing through a repair shop usually means taking out an unsecured loan, though occasionally the loan may be secured with the value of your car.

Getting a Personal, Unsecured Loan

If you have a very good credit score, it may be possible to get a personal, unsecured loan through a bank. A personal, unsecured loan will be cheaper than getting a loan through a repair shop, but it will also require that your credit history be solid — and there are usually significant limits on how much you can borrow. 

Using a Credit Card for Your Car Repair

It's possible to use a credit card for any car repair. Very few car repair shops won't take a credit card. The problem is that most credit cards have very high interest rates. If you don't have a credit card already, you will also need a good credit score to acquire one. 

If you do have a credit card that has enough money on it, financing a car repair in this way can be one of the more convenient options. You'll just need to pay back the debt quickly if you want to avoid paying too much in interest.

Acquiring a Car Repair Cash Loan

If you don't have good credit, a car repair loan is likely your best option. A title loan, a car repair cash loan will take out cash based on the value (equity) of your car. If your car is worth $5,000, you may be able to borrow that amount of money to repair the car. While the loan remains unpaid, there will be a lien on the vehicle. However, you can still use the vehicle, you just can't sell the vehicle before resolving that lien. 

Through some loan companies, it's possible to get a car repair cash loan. Your first step should usually be to connect with a repair shop, because a repair shop will let you know how much the repair is going to cost, as well as connect you to their own financier.