Buy Now, Pay Later vs. Credit Cards for Paying Your Vehicle Claim Balance
Rising Repair Costs and Payment Choices
If you’ve ever filed a vehicle insurance or service contract claim, you know that “covered” doesn’t always mean the entire repair bill disappears. Deductibles, shop fees, or items not included in your coverage can leave you with a balance to pay before picking up your car.
For many drivers, the natural move is to hand over a credit card. It’s quick, it’s familiar, and it gets you back on the road. But in recent years, another option has emerged: Buy Now, Pay Later (BNPL). Programs like Sunbit, a leading BNPL provider in the auto repair space, allow consumers to spread out their repair costs in predictable installments, often with lower or no interest compared to traditional credit cards.
So, which is the better choice for paying your vehicle claim balance? Let’s break it down.
The Credit Card Route
Credit cards are the most common way consumers pay unexpected expenses. They offer several advantages:
-
Convenience: Accepted everywhere.
-
Rewards programs: Some cards offer cash back or points.
-
Flexibility: Choose how much to pay above the minimum.
But they also come with drawbacks:
-
High interest rates: Average APRs are now 20–25%. A $1,200 balance can quickly grow if not paid off fast.
-
Minimum payment trap: Small monthly payments stretch repayment into years.
-
Impact on credit score: Large balances can increase credit utilization.
Example: A $1,200 balance at 22% APR could cost hundreds more in interest if only minimum payments are made.
The Buy Now, Pay Later (BNPL) Option
BNPL services, like those offered by Sunbit, are increasingly available in dealerships and repair shops. They’re designed to help customers manage costs without delaying necessary repairs.
How It Works
-
Apply right at the service desk or online.
-
Approval is typically instant, with a soft credit check (no impact on credit score).
-
Your balance is split into fixed monthly payments, often with 0% interest or low fees.
Benefits for Consumers
-
Predictable payments: Easy-to-budget installments.
-
High approval rates: Sunbit, for example, approves about 90% of applications.
-
Fast process: Most customers are approved in under a minute.
-
Lower cost of borrowing: Many BNPL options avoid the compounding interest of credit cards.
Things to Keep in Mind
-
Stay on schedule: Missed payments may lead to late fees.
-
Availability varies: Not every shop offers Sunbit or another BNPL solution yet.
Head-to-Head Comparison
| Feature | Credit Card | Buy Now, Pay Later (e.g., Sunbit) |
|---|---|---|
| Approval | Requires credit check | Instant, soft check (no impact) |
| Interest | 20–25% APR typical | Often 0% or low fixed fee |
| Flexibility | Minimum payments extend debt | Fixed, predictable installments |
| Impact on Credit | Can hurt if utilization rises | Usually does not affect score |
| Stress Factor | High – uncertain payoff | Lower – clear payoff timeline |
When BNPL Makes the Most Sense
BNPL options like Sunbit aren’t a replacement for every credit card transaction, but they shine in certain situations:
-
Deductibles: A $500–$1,000 deductible can be spread over months.
-
Non-covered repairs: Items like tires or accessories not covered by claims.
-
Larger repair bills: $1,000+ balances are easier to manage with installments.
-
Budget-conscious households: Clear payment schedules help avoid revolving debt.
According to AAA, the cost of owning and maintaining a vehicle continues to rise, making flexible payment options even more valuable for many drivers.
More Choices, Less Stress
Credit cards are familiar and widely used, but their high interest rates and revolving debt structure can make them costly for vehicle claim balances. BNPL options like Sunbit provide an alternative, predictable, and often lower-cost payments that fit into a household budget more easily.
The right choice depends on your financial situation and repayment discipline. The important thing is that today’s drivers have more choices than ever before, making it easier to approve necessary repairs and get back on the road with confidence.
💡 Want more consumer-friendly insights on vehicle protection, service contracts, and repair financing? Visit the Pessada Education Center for guides, FAQs, and resources to help you make smarter automotive decisions.
