According to a recent study from AAA. Potholes caused $26.5 billion in damage in 2021, leaving about 1 in 10 drivers to face an average repair cost of $600.
âWhen a vehicle hits a pothole with any type of force, the tires, wheels and suspension take the brunt of the impact and repairing any of these items is expensiveâ , said AAA director Greg Brannon.
While potholes are often impossible to avoid, AAA offers tips for protecting your car (and your wallet) from the impact of potholes:
- Check your tires. Regularly monitor your tire pressure and tread depth to minimize the impact of uneven roads. You should also keep an eye on your alignment, making sure to follow routine maintenance.
- Scan the road for potholes. It is important to note that potholes can be obscured by standing water and puddles. Reduce your speed safely, as running over a pothole at higher speeds increases the chance of more serious damage.
- Pay attention to the warning signs. After hitting a pothole, listen for any new noise and feel your direction for any unusual vibrations. Take your car to a trusted mechanic to determine if you need repairs.
If you’re faced with unexpected repair expenses after a pothole or other type of collision, keep reading to learn more about your financing options. You can also visit Credible to compare a variety of financial products, from 0% APR credit cards to emergency personal loans.
AUTO REPAIR LOANS: WHAT YOU NEED TO KNOW AND WHERE TO FIND ONE
How to pay for unexpected car repairs
Potholes can damage your bumper and your wallet. When you’re faced with unexpected auto repairs, paying cash is ideal. This ensures that you won’t have to pay interest charges or late fees, which can increase the overall repair cost.
Yet only about a third (36%) of Americans could cover an emergency expense of $400 in cash, according to the Federal Reserve. More than a quarter (27%) would need to borrow money, either by using a credit card, taking out a bank loan or asking a friend or relative for help.
If you’re stuck with an auto repair bill you can’t afford, here are three financing options to consider.
WHAT IS A CAR TITLE LOAN AND HOW DOES IT WORK?
Search buy now, pay later
Buy Now, Pay Later (BNPL) financing lets you break large expenses down into smaller installments that you pay back over time. Some BNPL providers offer zero rate options, but read the entire finance agreement to fully understand any interest charges or late fees that may be charged.
Call several auto repair shops in your area to see if any of them partner with BNPL companies like Affirm. Some mechanics may offer low-interest or interest-free financing through a credit card like Synchrony Car Care. Just be sure to stick to the payment agreement to avoid accruing deferred interest charges.
93% OF LOAN BORROWERS REGRET MAKING THEIR LOANS
Use a 0% APR credit card
Some credit card companies offer promotional introductory financing at 0% APR that can last up to 21 months after you apply for a new card. This can effectively give cardholders the ability to pay for auto repairs without paying interest, as long as the bill is paid in full within the promotional period. If not, you will be charged the regular purchase APR on the remaining balance.
Keep in mind that zero rate credit card offers are generally reserved for applicants with very good to excellent credit, as defined by the FICO model such as a credit score of 740 or higher. You should also be aware of the annual fees and late fees that come with the card.
You can visit Credible to compare 0% APR credit cards for free without affecting your credit score.
PERSONAL LOAN SETUP FEES: ARE THEY WORTH THE COST?
Borrow a fixed rate personal loan
A personal loan is a type of unsecured lump sum loan that you repay in predictable monthly installments at a fixed interest rate. Since these loans don’t require collateral, you can use the financing however you see fit, including financing car repairs.
Personal loans offer quick funding and lenders can deposit the amount directly into your bank account within one business day of loan approval. But keep in mind that you will pay interest, which will add to the overall cost of borrowing. Yet personal loans generally offer lower interest rates than credit cards, Fed data shows.
It is important to note that borrowers with good credit will see more favorable loan offers than applicants with bad credit. You can browse the current interest rates in the table below and use Credible’s personal loan calculator to estimate your repayment terms.
10 BEST PERSONAL LOANS FOR FAIR CREDIT
Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.