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A guide to car repair loans
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A guide to car repair loans

25/02/2022

If you own a car, you’ve probably felt a sinking feeling in the pit of your stomach when it starts to make strange noises — a sensation that gets worse when money is tight. If you’re in this situation, a car repair loan is one popular way to keep your car on the road. 

In the UK there are a few finance options available when unexpected car repairs strike. In this blog we’ll take a look at some of the options. 

What is an auto repair loan? 

An auto repair loan refers to a loan or credit line designed specifically to cover car repairs. Most of the lenders specialising in car repair loans recognise that repairs often arise in an emergency situation, so they try and make the application process simple so you can access the cash ASAP and get repairs done quickly. 

In most cases lenders look for a good credit rating in order to expedite your loan, but most offer lenders loans for bad credit as well. 

Some of the benefits of car repair loans include: 

Zero collateral: Most car repair loans are unsecured, meaning you won't have to sign your house or some other asset away in order to obtain one. 

Lump sum access: Once you’re approved, you’ll get the full amount of the cash in a bank transfer or via a special debit card that you can use straightaway. 

It’s fast: Care repair loan specialists know that car repairs are often urgent, so they aim for speed. Some will provide the money in as little as one business day. If your credit is poor, it might take a day or two longer. 

If you decide to take out car repair loan, be sure to look around. There is more than one lender out there and a range of loan options to consider. 

Should I get a loan, or just use my credit card? 

While credit cards can offer a simple way to cover any unexacted expense, for car repairs it might not be ideal. If you had a credit card with 0% APR and can pay down the balance quickly, that could be an attractive option. But if you’re like most people with a higher card interest rate, or you won't be able to clear the balance quickly, the interest charges could be hefty. 

The interest rate on a car repair loan might be more competitive. For a large repair bill that could take months to pay off, a car repair loan is probably the more attractive choice. 

What if my credit rating is poor? 

Any lender offering financing will want you to demonstrate good credit, however car repair loan specialists typically offer loans for people with poor credit too. You may have to pay higher fees or take on a less attractive interest rate, but on the upside, you’ll be able to cover your car repairs and stay in the driver's seat. 

Some car manufacturers have started offering car repair financing of their own. It’s worth looking into, though bear in mind that not every dealership signs up to participate. And when they do, you may have to go in person to complete an application.   

After that, the number of payments you can spread the cost over are often restricted to two or three. For repair jobs above £2,000, the approval processes and credit checks can be more stringent.  

Another option 

As digital technologies continue to transform how we buy and pay for services, 'buy now, pay later’ (BNPL) platforms are giving consumers more options to pay for things flexibly.  

In the automotive sector, the leading BNPL option is Bumper. We let you split hefty a repair bill into smaller, easy-to-manage, interest-free payments. 

  1. First visit our home page and enter your vehicle registration number and postcode.  
  2. After that you search for a local repair centre and select the one you want.  
  3. Then complete a soft credit application for up to £5,000 and receive your unique Bumper Code  
  4. Processing typically takes less than a minute. Once approved you can book an appointment at your chosen garage  

When agreeing the cost of the repairs, just give your garage the Bumper Code. They’ll send a link to your smartphone, where you can choose how you want to spread out the payments. 

Pick the number of months you want to spread the cost over and pick a suitable date to complete the payments. You can even use Apple Pay or Google Pay to set it up.  

Bumper ensures that you never pay more for servicing or repairs when spreading the cost. And the maximum credit limit you’ve been offered is never shared with the garage. 

So, if car repairs suddenly become a necessity, consider your financing options. You might be able to finance the repair job and get access to the cash in a matter of minutes.  

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*By using Bumper, you are taking out a form of credit. You must be 18+ & a UK resident to apply. There are no fees, no interest or additional charges, however missed payments may incur a £12 administration fee and may impact your credit score. In extreme cases, recovering missed payments may include using a responsible debt collection agency, or as a last resort, taking legal action. Bumper’s instalment credit products are not regulated by the FCA.