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Exploring the three primary financing alternatives for auto parts helps you understand what happens behind the scenes and develop a strategy to purchase the merchandise you need.

Most stores and online shopping sites are not lending you money themselves. Instead, a third-party company does the dirty work for them.

Therefore, researching the alternatives, choosing the option with the most favorable terms, and obtaining a possible approval before you go shopping puts you in the driver’s seat.

Personal loans, buy now pay later programs, and credit cards all have different pros and cons, with a unique fit for performance, after-market, and accessory transactions.

Personal Loans for Performance Parts

Personal loans work well for enthusiasts who purchase performance auto parts to spiff up their exotic sports cars or customize their new ride. It is a hobby and a passion for many people.

Hobbyists often have the luxury of time to obtain the best financing deal (lower interest rates and origination fees) before they go shopping and fall in love with a specific turbo kit, race engine, suspension system, or exhaust manifold. Therefore, it makes sense to line up your financing before picking out your upgraded equipment.

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Monthly Installments

Request a personal loan (Affiliate Link) to fund your most expensive performance car part purchases. If approved, the online lender will deposit funds directly into your checking account, which allows you to shop around for the lowest component prices and repay the obligation over the years rather than months.

Having a war chest of borrowed money in your checking account can work like a tool to compare pricing for high-ticket turbochargers and airbag lifters without concern for whether the outlet “offers to finance.”

Also, personal loans feature longer repayment terms, which can last up to five years for the most qualified borrowers. More time translates into lower monthly installments, which are much easier to afford.

Income Only

Income-based personal loans appeal to car buffs with blemishes on their consumer report, which makes it harder for them to qualify for mainstream programs. The main advantage is that you do not have to worry about declines after loading your shopping cart with the coil-over suspension kit of your dreams.

Select companies evaluate borrowers without a traditional credit check from one of the big three bureaus: Equifax, Experian, and TransUnion. Likewise, they do not rely on credit scores from FICO or Vantage.

Instead, they pull reports from second-tier bureaus that assemble financial data from alternate sources such as rental apartments, utility companies, etc. You can get your approval decision before you go shopping.

Buy Now Pay Later for Replacement Parts

Many auto part outlets promote buy now pay later options, which are well suited for after-market replacement items, as we will explain shortly. Do-it-yourselfers often need to fix their jalopy and get it back on the road immediately.

Emergency car repairs call for fast answers with few hassles. Sometimes, a one-stop point-of-sale solution proves most convenient – even though the retailer outsources the financing function to another company.

Quick Decisions

Third-party companies such as Acima, Affirm, Bread, Klarna, Snap, and others manage buy now pay later programs with fast approval – for qualified borrowers. The quick decision at the point-of-sale is critical when you need after-market parts to fix your car right away.

  • Replacement engines
  • Rebuilt transmission
  • Radiators
  • Catalytic converter
  • Camshaft

Keep in mind that the lure of possible instant approval is not a guarantee. You could find yourself at the checkout screen or stand without the ability to purchase the merchandise you need.

Therefore, you may want to secure your financing before shopping to avoid this dilemma – keeping in mind that each retailer may partner with only one of these lenders. You may wind up limiting your options.

No Credit Check

Only a small subset of buy now pay later companies will approve your auto parts purchase at the point of sale without a credit check. Read the fine print as we did. If you have a history of derogatory information on your consumer report, you will need sufficient open-to-spend on a credit card to make it work.

Open-to-Spend = Account Limit – Current Balance

The third parties offering buy now pay later programs without a credit check are not lending their own money. Instead, they bill one of your existing credit cards in equal installments. They protect themselves by placing a hold on your account in the amount of the purchase.

Of course, this only works when you have enough open-to-spend. Therefore, do your homework before loading your shopping cart with a fuel pump, struts, and shock absorbers. The store may not offer any credit check options, or you might have maxed out the limit on all of your existing cards.

Credit Cards for Auto Accessories

Credit cards have been the first car parts payment option for decades. As a revolving account, your open-to-spend goes up each time you make a payment, making them an excellent choice for regular small-dollar accessory purchases.

  • Air filters
  • Wiper blades
  • Light bulbs
  • Fluids & chemicals
  • Other accessories

However, once again, the retailers do not “offer the financing” themselves. Instead, they outsource the function to outside banks via one of two methods.

Private Label

Private label or co-branded credit cards include the auto parts retailer name and logo, while behind the scenes, a specific third-party bank handles the financial underwriting tasks. For instance, Synchrony Bank issues the cards touted by NAPA and Pep Boys and determines who to approve or decline, and the interest rates to charge.

Retailers offer co-branded credit cards as a means of getting regular customers back into their stores to purchase more components. For example, Pep Boys and NAPA will provide several types of attractive incentives directly to card members from time-to-time.

  • Discount coupons for popular items tied to vehicle mileage
  • Frequent shopper points and rewards
  • Low-interest promotional periods on larger transactions

General Purpose

General-purpose credit cards (VISA, MasterCard, Discover, etc.) are always welcome as a payment method for accessory items at all auto parts stores. In this case, an army of issuing banks front the cash and collect money from the cardholder later on, and the retailer pays a small fee called interchange.

However, once again, general-purpose credit cards work well only when you have sufficient open-to-spend on the account. Also, people who revolve the balance often pay hefty interest rates.

Shoppers with maxed out balances can take one of three steps in advance to free up more spending power.

  1. Pay off revolving debt by taking out an installment loan
  2. Apply for a new account which adds to your total credit limit
  3. Ask for a credit limit increase on one of your existing accounts