5 Tips for Getting a Car Repair Loan After a Collision

Automotive accidents are no fun for anyone involved, particularly if they leave your vehicle in a state of significant disrepair.

Sometimes the cost of getting a car back on the road following a collision will be prohibitive, or you may not want to sink your entire savings pot into this process.

With the help of a car repair loan, you can soften the blow of a costly collision. But what’s the best way to go about this?

Does my credit score matter?

Put simply, yes. If you’ve got a good credit history and a healthy score, you’ll be able to access the most attractive loan deals. If you’ve got a low score, expect to pay more in terms of interest and additional fees.

There are lots of ways to borrow money, and it’s generally more affordable for those with good credit. But don’t be disheartened, as there are lenders out there that cater to those with bad credit; you just need to be prepared to pay the price.

You can also take steps to improve your credit score, giving you access to better car repair loan products and many other financial perks.

Why don’t I just pay with a credit card?

The problem with paying for post-collision car repairs using a credit card is that interest rates tend to be much higher than on a standalone loan.

Of course if you’ve found a good credit card deal, then you might have a zero interest agreement to take advantage of. It’s a case of considering your circumstances and making the right decision based on them, not on any generic advice.

How much do common auto collision repairs cost?

The cost of repairs required after auto collisions can vary significantly. It’s not just down to the nature of the damage, but also the make and model of the vehicle involved.

Non-structural repairs to things like body panels and bumpers are generally more affordable, while if the more complex mechanical aspects like the engine are compromised then expect to pay a tidy sum to get them remedied.

Whatever the damage you’re faced with, get a few quotes from different professional repair providers before you look for a loan. That way you’ll know exactly how much to borrow, rather than needing to take a guess.

What’s the best repayment period to pick?

With a car repair loan, you may have the option to repay over shorter or longer periods, depending on the package in question and your own preference.

Generally speaking a longer repayment period will let you lower the cost of individual monthly repayments, while paying out more in interest over the lifespan of the loan. Meanwhile shorter periods will come with larger repayment sums, but less interest to bear.

Again, your own circumstances matter most here. If you can afford larger repayments over a shorter period, this is the more affordable option. But if your finances are already stretched, a lengthier package might make more sense to keep your budget in check month by month.

Won’t my insurance cover the costs?

In many cases, you’ll be able to get assistance in paying for post-collision auto repairs from your insurer, so checking this first makes sense.

However, many insurers will only reimburse you for repairs already carried out, rather than paying for them upfront themselves.

As such you might need to get a car repair loan as a stop gap, in the hopes that your insurer will hand this sum back to you once all of the paperwork is sorted. So even if it feels like an emergency, don’t be too hasty and check the small print.

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