Best Auto Repair Financing: Fix Your Car Fast
Get approved today and get your car back on the road tomorrow
Loans for auto repair financing at a glance
What is auto repair financing?
If you’re looking to fix your car and spread the cost over time, you need auto repair financing. There are a few different types of auto repair financing, but this article mostly focuses on auto repair loans, a type of personal loan.
A personal loan comes as a lump sum of cash, usually by direct deposit and sometimes the same day that you apply. You’ll pay off what you borrowed over time (usually 12 to 84 months), and your monthly payment will always be the same.
Auto repair loans pros and cons
Pros
- Interest rates are usually lower than credit cards if you have excellent credit
- Applications are quick, easy and usually entirely online
- Can be easier to budget since payments are always the same
Cons
- High interest rates for bad credit (although you still might be approved)
- Some loans come with an origination fee
- Won’t come with a 0% APR period or rewards like with some cards
An auto repair loan is usually a better choice than a standard credit card — as long as you have excellent credit. The average rate on a personal loan for 720+ credit scores is 17.71%. Credit cards, on the other hand, have a current average rate of 24.28%.
If you have bad credit, you can still get an auto repair loan, but be prepared for high rates. Also, the worse your credit, the more likely it is you’ll have an origination fee. This is an amount the lender will deduct from your loan before sending it to you.
Always use a personal loan calculator to see if the overall cost of the loan is worth it.
How to find auto repair financing with LendingTree
Shopping around for an auto repair loan on LendingTree can save you $1,659 on average. That’s huge — the average car repair bill is $838 according to Kelly Blue Book (KBB). Here’s how it works.
Fill out one form
Take two minutes to answer questions about you and the money you need. We’ll take care of the rest. It’s free, simple and secure.
Shop your offers
Lenders will compete for your business. We’ll gather offers from up to five lenders from the nation’s largest lending network.
Get paid in as little as 24 hours
Choose the offer that works best for you and finalize your loan directly with the lender. You could get your money as soon as tomorrow.
Alternatives to auto repair loans
| Type of financing | What it is | Why we like it | Why we don’t like it |
|---|---|---|---|
| 0% APR credit card | A card that offers a zero-interest promo period (usually six to 21 months) |
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| Rewards credit card | A card that lets you rack up cash back or airline miles |
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| Buy now, pay later | Apps that let you split purchases into payments, usually four over six weeks (including one down payment) |
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| Paycheck advance app | An app that lets you access your money before payday |
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| Repair shop financing | A branded credit card offered by your repair shop (Goodyear and Firestone, for instance) |
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How to decide if it’s worth fixing your car
You should decide if the repair is worth it before fixing an older car. It might make more sense to buy a new car, but it depends on how much your car is currently worth and how much life it has left.
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Get car repair estimates
Find some repair shops with good reviews. Word of mouth is best — consider asking a local Facebook group. Then, get two or three repair estimates. -
Find your car’s value
Use KBB and Edmunds to get an idea of how much your car is worth, minus depreciation. For the most accurate results, provide your vehicle identification number (VIN) and be honest about the car’s condition. -
Compare cost to value
If the car costs more to fix than it’s worth, fixing it won’t make sense. Other than that, it’s up to you to decide if repairs are worth it. Has your car been falling apart for a while? Don’t sink money into a car that will continue to give you trouble. -
Check auto loan rates
The average rate for a new car loan is 6.73%, according to Experian’s most recent data. For used cars, it’s 11.87%. If you have good credit, the peace of mind that comes with a reliable ride might be worth the car payment.
3 ways to get approved for auto repair financing with bad credit
Add a co-borrower
Getting a joint loan with another person can help if you have bad credit. It’s best if your co-borrower has excellent credit. Missed payments affect their score as well as yours, so stay true to your payment schedule to avoid tension.
Offer collateral
Secured loans need collateral and are generaly easier to qualify for. Lenders probably won’t accept your broken-down car as collateral due to its reduced value. But Best Egg lets you use your home’s fixtures, and banks or credit unions might let you borrow against your savings.
Use a loan marketplace
When you shop for new car insurance, you probably contact multiple companies for quotes. You should do the same for loans since — lender has a different way to calculate rates. Get access to our exclusive lender network and let LendingTree do the shopping for you.
Avoiding predatory auto repair financing
Skip loans with APRs above 36%. You should also have at least a few months to pay back what you borrowed. Otherwise, you could be at risk for predatory lending.
Payday loans: Payday loans usually have triple-digit APRs, and your entire loan will be due on your next payday, usually by autopay. If the money isn’t there when the payday lender attempts the withdrawal, expect fees from your bank and the lender.
Title loans: A title loan uses your car as collateral. So do some personal loans. But title loans usually have extremely high interest and repayment terms between 15 and 30 days. Most people end up getting a second title loan to pay the first to avoid getting their car repossessed.
High-interest installment loans: A high-interest installment loan is a personal loan, but with super-high rates and shorter repayment terms. Tribal loans are an example, which can carry APRs as high as 800%.
Frequently asked questions
No, your car insurance typically won’t pay if your car breaks down due to wear and tear or a manufacturer defect. Instead, car insurance pays out if your car is involved in an accident.
There are some rare times when insurance may pay for breakdowns, but it requires extra coverage. For instance, you could be covered if you had a Geico policy with mechanical breakdown insurance. Breakdown coverage is rare and only offered by a few companies.
If you can’t afford to pay for car repairs, you have a few finance options:
- Auto repair loan: Best if you have 670+ credit, but can qualify with a lower score
- 0% APR card: Best if you can pay off your balance quickly
- Rewards card: Best if you plan on needing more repairs in the future
- Buy now, pay later: Best if you can pay in four installments
- Paycheck advance app: Best if you have bad credit and have a small emergency car repair
- Repair shop financing: Best if the repair shop offers 0% special financing or discounts
Our methodology
We reviewed more than 30 lenders to determine the overall best car repair personal loans. To make our list, lenders must offer auto repair loans with competitive annual percentage rates (APRs). From there, we prioritize lenders based on the following factors:
Accessibility. Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
Rates and terms. We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
Repayment experience. For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.
According to our standardized rating system, the best auto repair loans come from Best Egg, LightStream, OneMain Financial, SoFi, Upgrade and Upstart.