5 Ways to Pay for Car Repairs

By Janet Siroto · December 26, 2023 · 6 minute read

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5 Ways to Pay for Car Repairs

Almost everyone needs to finance car repairs sooner or later. It might be a breakdown on the highway, a fender bender at the supermarket parking lot, or perhaps (ugh) someone steals your catalytic converter.

Whatever the case, car repair bills can be significant and arrive without warning, stretching your budget to the max. If you’re in this situation, consider these five strategies to pay for urgent repairs and get back on the road again.

Strategies to Pay for Car Repairs

If you get hit with a large car repair bill or are thinking ahead and know a big-ticket item is coming up, consider the following ways to pay for the work that needs to be done.

1. Dip Into Your Emergency Fund

You may have heard it said that you should keep an emergency fund easily accessible for precisely this situation — an unexpected expense. But should you really use your emergency fund to pay for car repairs?

Dipping into your emergency fund might be a solution if you don’t have other cash available to pay for repairs. And, for many people, having a vehicle up and running is vital to their work and personal lives. In this way, it is a valid reason to tap your emergency fund.

What’s more, using your emergency savings instead of reaching for your credit card could save money on interest and other applicable costs.

Of course, if you dip into your emergency fund, you may need to spend time building it back up so you’re prepared for any other emergencies.

💡 Quick Tip: Some lenders can release funds as quickly as the same day your loan is approved. SoFi personal loans offer same-day funding for qualified borrowers.

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2. Use Your Insurance

Is your car repair related to an accident? If so, your car insurance may help. It’s designed to protect you financially by covering some of the repair costs for vehicle damage and the medical bills related to any injuries.

The type of coverage and circumstances can vary.

•   For example, comprehensive insurance may help with some costs even if the accident didn’t involve another car or if the damage was caused by an unexpected event, like a tree falling on your hood.

•   Collision insurance doesn’t typically cover damage caused by normal wear and tear. This means that your coverage may not include things like theft, vandalism, or weather damage.

•   There is one type of insurance — what’s known as mechanical breakdown insurance (MBI) — that covers some types of repairs. Therefore, if you have damage caused by routine use of the vehicle and you have an MBI policy, you may want to check to see if the repair is covered.

Before going this route, consider whether using your insurance will actually be cheaper than paying out of pocket. Making an insurance claim could cause your insurance rates to rise.

It’s wise to understand how your car insurance works. The specific instances that your insurance will cover should be laid out in your insurance policy. The amount of your policy deductible as well as the repair and type of coverage will likely be some factors you review with your insurance carrier.

3. Try to Negotiate

Whether you have to replace multiple tires after driving over road debris or you have to install new brakes due to normal wear and tear, you may be looking at a hefty repair bill.

The good news is that car dealerships aren’t the only places where you can haggle over your car. Local car repair shops might be willing to cut you a deal to win your business.

•   Consider asking the repair shop for a written quote explaining precisely what is wrong with your vehicle, how the mechanic plans to fix it, and what the cost will be.

•   Once you have this written estimate in hand, you may want to get a second opinion. Sometimes auto mechanics will offer you a discount on a quote from another shop to get your business.

•   You could also ask the mechanic to limit their quote to only the essential repairs to ensure that they don’t try to upsell you on prematurely replacing all your tires when the problem you need addressed is your power steering.

4. Put It on a Credit Card

It can be important to protect yourself against excessive credit card debt, but if you need to shell out hundreds, or even thousands of dollars for a quick car repair, you may find yourself reaching for that plastic lifeline.

You may feel as if you don’t have options, but proceed with caution. Using a credit card may come at a high price. Credit cards can carry high-interest rates that, if not paid off in a timely manner, can drive up the original cost of the car repair. If you can’t pay off your credit card debt right away, you may end up spending much more for your repairs by the time you make your final payment.

5. Consider a Personal Loan

Another option for paying for car repairs when you have no cash on hand may be taking out a personal loan. Personal loans are sometimes overlooked as a way to come up with cash fast, but in the right circumstances, a personal loan can come in handy.

A personal loan can often offer lower interest rates vs. options such as using your credit card. This could help you save money when facing unexpected car repairs.

•   A personal loan is typically an unsecured installment loan, which means that you borrow a set amount and pay it back in equal monthly installments over a fixed period. “Unsecured” means that the loan is not tied to any physical piece of property through a lien, but instead offered to borrowers based on factors like creditworthiness.

•   Another benefit of using a personal loan to pay for car repairs is the relatively quick application process. While you’ll need to meet certain qualifications set by your chosen lender in order to secure financing on a personal loan, some lenders disburse loan funds within a few days.

Depending on your situation, a personal loan might be the right option when it comes to helping you get back behind the wheel and onto the road.

Recommended: Smarter Ways to Get a Car Loan

The Takeaway

If you need to pay for car repairs, you have a few options to consider, from tapping your insurance (if appropriate) to using your emergency fund to taking out a personal loan. If the latter seems like the right move for you, shop around to find the offer that’s the right fit for you.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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