Smart financing solutions for car parts and services even with bad credit
Maintaining your car can be very stressful when you don’t have access to savings or if you've got a poor credit score. The older your car is, the more likely it is that it will need regular repairs. During the cost of living crisis, it can be hard to cover the cost of car parts and services, especially if you've got bad credit.
The good news is that you may have options even if you do have a low credit score and need to buy new car parts or have your car serviced. Although getting finance to maintain a car with bad credit can be very challenging, it might not be impossible.
Some things that you can think about doing to make your situation better include:
Checking your credit report for errors
There’s always a chance that your credit score is lower than it should be. Errors can cause your credit score to drop, so get hold of a copy of your credit report so you can see if there are any mistakes on there. If there are any inaccuracies, talk to the creditor or the credit referencing bureau to get them fixed. Your credit score could rise once you have removed these errors from your report.
Budgeting wisely
You may be able to cover the cost of car parts and services if you make cutbacks elsewhere. Perhaps you could cut back on subscriptions, takeaways or nights out in order to fund essential car maintenance. Create a detailed budget so you can see exactly how much you have coming in and going out on your account – you may have more left over than you think.
Look for a budget friendly car service provider
If you go to an independent garage, you may be able to make savings. Some of these garages offer services and parts at lower rates compared to large branded companies. You may also save a bit of money if you buy parts manufactured by third-parties.
Negotiate
Tell your garage about your financial situation. They might be flexible enough to help you. Some garages might be happy to negotiate the cost of services and parts or offer flexible payments plans.
Get a credit-builder loan or credit card
Loans and other financial products designed to help you build your credit score can come in handy in this situation. You may need to pay more interest than someone with a higher credit score but this could be the difference between keeping your car on the road and being forced to rely on public transport. Many lenders specialise in providing finance to people with bad credit. If you do manage to get a loan or credit card designed for someone with bad credit, read the terms and conditions carefully. Make sure that you understand the full cost of the finance before you agree to anything.
Ask for help
A recent study found that 15% of adults in the UK had no access to savings, which means there might be more people in your situation than you think. If you’re in a specific profession, you may be able to get a grant to help you with car repairs. For instance, some people working in the care sector have been able to get grants from charities to help with car maintenance.
Don’t rule out crowdfunding.
You may not associate crowdfunding with paying for car repairs, servicing and car parts but you may be surprised to see how generous and helpful some people are when they find out someone is struggling. Keep your fundraisers updated with how things are progressing and don’t forget to thank them when you have reached your target.
You could also consider asking friends and family members for help.If you do decide to take out a loan, you’ll need to show the lender that you can afford the repayments. You can use payslips and bank statements to demonstrate this. You could also ask a co-signer to help. A co-signer agrees that they will make the repayments if you can’t for any reason.
Buying another car could be an option if your vehicle has started to need a great deal of maintenance. The cost of a new vehicle could be much less expensive than carrying on maintaining the car you're using at the moment.
How to build your credit so you can cover car parts and services costs in future
There are lots of things you can do if you have bad credit now and wish to improve it so you can comfortably cover car maintenance costs in future. If you’ve already checked your credit reports for errors, another thing that you can do is get yourself on the Electoral Roll if you haven’t already. This helps lenders to verify your identity and your address, which can improve your credit score.
A credit card or loan designed to help you improve your score can be helpful, but make sure you always make the repayments on time as failing to do this can make your rating worse. Late and missed payments can have a disastrous impact on your score. Only use credit when you need to and don’t max out your limits. Keeping some credit available can be very good for your score.
Try to avoid making too many credit applications in a short period of time. Many applications can involve hard checks being run on you, and these can bring your score down by multiple points. Multiple applications can also make lenders think you’re a risky applicant.
Don’t be impatient if your credit score isn’t rising as fast as you want it to. It can take a long time for a bad credit score to become desirable again, so take good care and only apply for credit when you really need it.
You may have a lot of options available if you need to buy new car parts and services for your vehicle. Having bad credit doesn’t always mean that help isn’t available. Even if you can’t get access to any more credit, friends, family and the online community could be more helpful than you expect.
