Don’t Let Auto Repair Costs Set You On the Road to Ruin

By Zack | Life

Aug 10
car repairs

Don’t Let Auto Repair Costs Set You On the Road to Ruin

“I couldn’t find the sports car of my dreams, so I built it myself.” -Ferdinand Porsche

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So you need to get your car fixed, but after meticulously researching all of your choices in an effort to cut repair costs as much as possible, it’s pretty clear that the repairs are going to be costly. Your research has led you to the discovery that there is a huge regional difference in labor rates; the average cost in 2015 was $84.30 per hour, though the average in New York was $101, and in some areas, motorists might pay as little as $44. But you’re looking at a pretty hefty bill no matter where you go, and you’re already struggling to make ends meet.

Your research has led you to the discovery that there is a huge regional difference in labor rates; the average cost in 2015 was $84.30 per hour, though the average in New York was $101, and in some areas, motorists might pay as little as $44. But you’re looking at a pretty hefty bill no matter where you go, and you’re already struggling to make ends meet.

But you’re looking at a pretty hefty bill no matter where you go, and you’re already struggling to make ends meet.

Your savings are depleted and/or the bank of Mom and Dad has dried up, so you’re thinking about taking out a loan. The problem is that your credit is, to put it mildly, less than stellar, as the loan officer at your real bank let you know in no uncertain terms. What can you do?

The problem is that your credit is, to put it mildly, less than stellar, as the loan officer at your real bank let you know in no uncertain terms. What can you do?

What can you do? What should you do?

A good option – if you’re careful

Many borrowers with blemished credit have turned to short-term payday loans when they need modest amounts of cash. These loans have been problematic for many because of the extremely high-interest rates and the fact that most require payback in full in a single lump sum – generally on the borrower’s next pay date (hence the term “payday loan”). And you don’t think you’ll be able to scrape up the cash to pay back in time; if you’d had it in the first place you wouldn’t have needed the loan.

And you don’t think you’ll be able to scrape up the cash to pay back in time; if you’d had it in the first place you wouldn’t have needed the loan.

One type of loan to consider is an installment loan, which can be a reasonable middle ground between a conventional bank loan and a payday loan. Taking out an installment loan will generally allow you to borrow a larger amount than you could with a payday loan, though most of these loans are smaller than traditional loans offered by banks. And you can pay off the loan in small monthly installments, allowing more leeway with your budget and lowering your risk of defaulting on payments. One disadvantage is that the interest rates on installment loans can be very high as well, particularly if you don’t have good credit. And if the loan is spread out over a period of several years you could end up paying many times the original amount borrowed.

You can also pay off the loan in small monthly installments, allowing more leeway with your budget and lowering your risk of defaulting on payments. One disadvantage is that the interest rates on installment loans can be very high as well, particularly if you don’t have good credit. And if the loan is spread out over a period of several years you could end up paying many times the original amount borrowed.

One disadvantage is that the interest rates on installment loans can be very high as well, particularly if you don’t have good credit. And if the loan is spread out over a period of several years you could end up paying many times the original amount borrowed.

Taking out an installment loan will generally allow you to borrow a larger amount than you could with a payday loan, though most of these loans are smaller than traditional loans offered by banks. And you can pay off the loan in small monthly installments, allowing more leeway with your budget and lowering your risk of defaulting on payments. One disadvantage is that the interest rates on installment loans can be very high as well, particularly if you don’t have good credit. And if the loan is spread out over a period of several years you could end up paying many times the original amount borrowed.

Even so, an installment loan may be a viable option for you if the car is worth the investment and you can work the payments into your budget.

Not all installment loans are created equal, however, so you will need to research your options carefully, not only to get the best interest rate possible but also to avoid lenders who tack on exorbitant “hidden” fees in addition to interest charges.

Also be sure that you’ll be able to speak with a customer service representative whenever necessary.

Never take out a loan without fully understanding all of the terms.

Otherwise, borrowing money to get your car fixed could end up costing you more than trading in the old car and purchasing a new one.

Exploring alternatives, changing your habits

Apart from understanding your prospective lender’s terms, the most important point to consider before you apply for any type of loan is whether or not you can get the needed cash in another way.

Make sure you have truly exhausted all of your other less costly options. Even if you can’t borrow from Mom and Dad, another family member, or a friend or associate, it might be worth your while to explore other ways to raise or budget the funds, particularly if you have a little time to spare and the need isn’t urgent.

You might even consider holding a yard sale and getting rid of some items you no longer need.

And the next time you’re out shopping for some neat new toy or trinket, ask yourself how long it might be before you end up putting it out at your yard sale, and take a pass on the purchase.

Most important of all, make a commitment to get yourself into better shape financially to avoid future cash crises.

There are many ways you can cut costs so you’ll have more cash on hand when the next need arises.

For example, you can save a couple thousand dollars a year just by ridding yourself of costly financial habits and adopting better ones. If you have some money put away in savings, you might want to apply some of it to paying down or paying off any high-interest rate credit cards or other debts you might have. You might also consider paying bills such as insurance in one lump rather than making monthly payments since you pay a premium for the luxury of spreading those payments out over many months.

If you have some money put away in savings, you might want to apply some of it to paying down or paying off any high-interest rate credit cards or other debts you might have. You might also consider paying bills such as insurance in one lump rather than making monthly payments since you pay a premium for the luxury of spreading those payments out over many months.

You might also consider paying bills such as insurance in one lump rather than making monthly payments since you pay a premium for the luxury of spreading those payments out over many months.

And speaking of insurance, any expensive accessories such as custom wheels and tires or high-end aftermarket audio and navigation systems are not only expensive to buy, they also increase your insurance payments because they are attractive to thieves. So take a breath and carefully weigh the wisdom of

So take a breath and carefully weigh the wisdom of accessorizing your car with such add-ons.

It goes without saying that unless your car is truly a lemon, keeping up on basic maintenance can potentially save you thousands on repairs over time.

Read more: 6 Lies About Budgeting Keeping You From Success

Read More: Dealing With Debt Collectors

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About the Author

Zack is one of the co-founders of FreeUp and is in charge of setting the strategy for the blog and managing the day-to-day operations. When he isn't plotting new ways to create awesome blog content, he likes to geek out about global affairs, ride motorcycles and can probably be found hiking somewhere during his days off.

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