4 Ways to Afford Car Repairs if You Don’t Have an Emergency Fund
Although cars are a great tool, they can be quite expensive. This is especially true when you find yourself with an unexpected repair.
According to a recent AAA Survey, 64 million Americans had to borrow money to help pay for a car repair. Most financial experts recommend that you set up an emergency savings account; however, what do you do when you have an unexpected repair with no money in your savings account to pay for it?
1. Compare Prices
If you can shop around a little bit, take full advantage of it. Every mechanic will have a different rate. Some may charge by the hour, whereas other mechanics will give you a full quote based on the extent of the damage. When you have three or four options, you can make a better decision.
2. Ask Your Mechanically Inclined Friend
Do you know someone who is mechanically inclined? If so, ask them if they wouldn’t mind looking at your car. Offer something of value in return for their work. This is a great option when you can’t afford a repair shop.
3. Borrow Money from a Friend
If you have a close relationship with any of your friends, consider asking them for a temporary loan. Be honest about why you need the money, and make it clear that you have every intention of paying them back.
These types of personal loans can be quite tricky. It is imperative that you set up an appropriate payment plan that will not hurt your relationship long-term.
4. Payday Loans
If you need the money and have nowhere else to turn, payday loans can be a great option. When I got in my car wreck a year ago, I had no emergency fund in place. I had no other choice but to take out a loan. Graciously, companies such as ELC Loans offer easily accessible loans for an emergency.
Although emergency loans can help quite a bit, it is important to remember that they have a high interest rate. If you take out one, make sure you have enough money in your bank account to pay it back on a due date.
Unexpected car repairs are a part of life. If you own a car long enough, you will come across unexpected incidents numerous times. Sometimes, you may not have an emergency fund set aside. If that’s the case, any one of the four options mentioned above could benefit you greatly.
Brian Loman has more than 10 years of experience working in short-term lending industry. His main goal is to help people become financially literate and find their path to stability.