Loans and other options when you need to urgently replace your car

This is a very real situation faced by a lot of people – your car is kaput, repairs are expensive and it looks like you’ll need to replace it urgently. Have you been in this situation? How do you get mobile again quickly?

You’re under pressure now, but you really don’t want to make a bad decision and enter into a purchase while feeling distressed. Here are some options:

Option one: Buy a new car for the long-term

You’ll be purchasing a new car to replace your old one and expect to be keeping it for the foreseeable future. This is where you’ll be looking at all the features the replacement needs to have in order to cater for your lifestyle now, and in the future. Your choice needs to be a practical one, and, allow for any “vanity”.

This is obviously the option that will require the most cash to put into action. This is a big purchase. Chances are, one option is to look at the financing options from your dealer, although you may well get a better deal from a loan lender. Shop around for the best deal and check the small print.

Option two: Buy an “emergency” car

This option is where you’ll buy a car just to get you back on the road. Long-term practicality out of the window. Vanity, out of the window. If it’s pink with yellow wheels, so be it – you’re mobile so the job is done. People who opt to do this tend to go for an “old banger”, but you should avoid buying a car that you will be towed to a garage the next day (then you’ll be starting over again). You can actually find really good, sturdy cars for very reasonable prices. eBay and other used car sites are good places to start. It’s advisable to use your money to buy a good example of a popular car (Ford, Vauxhall, etc) rather than a poor example of a prestigious car, simply because parts and repairs are cheap and widely available. Don’t buy the first car you find, unless you have to, shop around instead. Also, check out the safety rating of a car before you buy. Don’t buy a death trap.

The good news with this option is that the cost is low – in fact, you might even be able to make it cost-neutral if you can trade in your own car to cover the cost, including any insurance adjustments.

The bad news is that you’re buying a car for the short-term, so you’ll probably need to replace it soon enough for a car that’s safer, more reliable and/or environmentally friendly.

Option three: With the above options considered, repair your existing car

This might still be a viable option to you if the above options aren’t suitable. You know this car – its quirks and where it squeaks, after all. When you have it repaired, take it to the nearest reputable mechanics – they’ll be cheaper than the main dealers for sure. Tell them you don’t need original manufacturer parts – put on the best value they can find. If it comes to it, shop around yourself for the parts (you’d be amazed at how much you can save buying reconditioned parts if you shop around yourself.) Google is your friend at this time, and search eBay for parts too, particularly if second-hand parts will do the job.

A loan might be required to finance the repairs, rather than using your credit card. Or you can use a loan to pay off the balance on the card, as soon as possible. As this expense is likely to have been unexpected, you won’t necessarily know yet when you can pay it off. A loan could well be a better option when you’re uncertain when you will be able to clear a debt.

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