How To Buy Auto Mechanic Tools Without Getting Caught in a Predatory Loan

Picture this: you have nailed the interview and got hired for the job of your dreams as a diesel mechanic, automotive technician or auto body repair specialist. Life is great and you are amped when you realize that you’re missing some essential tools. If you’re not paying attention, tools can get expensive fast and since it will ultimately be an investment into your new career it is easy to justify the expense and get lured by the siren call of financing. 

The term ‘predatory loan’ may sound you familiar. Most associate it exclusively to home mortgages and payday loans, however, that’s a mistake. If you are not careful, you can get trapped by predatory loans during any major transaction. The objective of this article is showing you how to buy tools and equipment for your work as an automotive technician without getting caught by one of these predatory lending practices. 


What Is Predatory Lending? 

Predatory lending is an unfair practice that takes advantage of people who need immediate cash, like you, when buying expensive tools. Under these circumstances, the lender may deceive you to take a loan that only benefits him.

You can recognize this type of loan when you notice: 

  • Excessive fees for document preparation, appraisals, and other formalities 
  • Negative amortization (unpaid interest gets added to the principle) 
  • High prepayment penalties 
  • Abnormally high rates 
  • A suspiciously good proposal (bait) offering you more money than you asked for 
  • Balloon payments instead of fixed monthly payments 
  • Evasive or ambiguous answers when you ask how much the loan will cost you 
  • The lender doesn’t seem to worry about your existing debts or income 

Even if you or your business are in urgent need of new tools or equipment we strongly advise you to keep from accepting this type of loan. In the long-run, it will harm you and your shop. 


The Smart Way To Buy Your Tools 

 Well, you still need those tools. If taking a risky loan is not the solution then what. The answer is to change your mindset. A combination of taking the right buying decisions, acceptable credit options, and honesty. 

Choose wisely where to buy tools 

 Tools are a big investment for your business, take your time for research. Ideally, you want to buy your tools in one place. Why? Because you are not only buying tools. You want to establish long-term relationships with a reliable provider.

While researching suitable candidates look for:  

Shops offering good rewards programs.

You can save significant amounts of money with reward programs. Look for cashback incentives, credit options, volume discounts, loyalty incentives, and more. 

Shops offering renowned brands.

Choose a good brand and then try to stick to it. Having tools from the same brand bring many benefits. Have in mind your favorite brand when choosing a provider. 

Competitive prices.

Last but not least, prices are important. Usually, big tool shops have aggressive sales programs that let them beat competitors’ prices (or at least giving you the same price). Ask for this kind of incentive. It will give you peace of mind that you won’t pay more for the same tool. 


Have a businessman mindset when buying tools 

Become a smart buyer. Have the right mindset. You are not buying tools, you are buying assets for your business. Be objective, don’t let your emotions cloud your judgment. During your research and decision-making process keep the following aspects in mind: 

Ask yourself if you can rent some of the tools. 

You probably won’t need some expensive tools as part of your inventory. Having tools idling will not help you at all. If you only need a tool for a special job then it’s preferable to rent it and charge the cost to the client. 

Consider buying OEM-refurbished tools.

Depending on the tool, you may save big time by buying certified refurbished tools instead of new ones. Once again, be objective, the great look of a new model is not what matters the most. Don’t fool yourself with marketing. Buy the right tools for the right job. 

Be honest about what you and your shop really need.

Honesty about your shop requirements can also save you from an unnecessary loan. Do you really need a 3,000 pieces toolset when you can do the same job with a 1,000 piece set? It is absolutely necessary using an industrial-level power drill for occasional jobs? 

Wrapping Up 

Hopefully, this article will assist you in avoiding getting caught by predatory lending. Taking a loan from a trustworthy lender is completely acceptable from a business perspective. However, rushing for money to buy the latest shiny (and probably unnecessary) tool is another thing. Even if your auto shop really needs tools, don’t put yourself in a disadvantaged position. Don’t take the bait. Shop smarter, and only take debts you can pay.