Car Repair: Have a Plan

The Financial Benefits of Car Repair

Opting to repair your vehicle rather than buying a new one can save you a substantial amount of money. According to AAA, the average cost of owning and operating a new vehicle in 2021 was approximately $9,666 per year, which includes depreciation, insurance, and maintenance costs (source). By choosing to repair your existing vehicle, you can avoid the steep depreciation costs associated with new cars.

Prolonging Vehicle Life

Regular maintenance and timely repairs can significantly extend the life of your vehicle. Even cars with high mileage can continue to run efficiently for several more years with proper care. According to a study by IHS Markit, the average age of vehicles on the road in the U.S. reached a record high of 12.1 years in 2021 (source). This indicates that many people are successfully keeping their vehicles longer through regular maintenance and repairs.

Budgeting for Repairs

If your vehicle is paid off, the money you save from not having a car payment can be allocated towards future repairs or other expenses. It's wise to create a list of potential maintenance needs for the year and estimate their costs. According to Consumer Reports, the average annual repair cost for a vehicle is around $400 to $600 (source). Setting aside this amount can help you manage unexpected expenses without financial stress.

Preparing for Unexpected Breakdowns

As vehicles age, the likelihood of breakdowns or mechanical failures increases. Therefore, it's essential to set aside additional funds for these unexpected expenses. Having a financial cushion can prevent panic when your vehicle stalls or requires costly repairs.

Emergency Funds

An emergency fund specifically for car repairs can alleviate the stress associated with unexpected breakdowns. According to a survey by Bankrate, only 39% of Americans could cover a $1,000 emergency expense using savings (source). By proactively saving for potential car repairs, you can avoid financial strain and ensure you're prepared for any situation.

Handling Accidents and Emergencies

Accidents can be particularly stressful, especially if your vehicle is damaged and won't start. Having a plan in place can help you manage the situation more effectively.

Insurance and Tow Services

Your insurance may cover part or all of the repair costs following an accident. Additionally, having access to tow services through your insurance or an automobile club can be incredibly helpful. According to the National Association of Insurance Commissioners (NAIC), the average annual cost of auto insurance in the U.S. is around $1,190 (source). Ensuring you have comprehensive coverage can provide peace of mind in case of an accident.

Scenario Planning

Consider various scenarios where your vehicle might fail and have a plan for each. For example, if your car stops running while you're at the grocery store or out of town, do you know who to call for help? If your vehicle breaks down on the way to pick up your children from school, do you have a backup plan? While it's impossible to plan for every situation, having a basic plan can make a significant difference.

Essential Tips for Car Repair Preparedness

1. Always Carry a Cell Phone: Ensure you have a fully charged cell phone with you while driving to call for help if needed.
2. Emergency Contacts: Have a list of emergency contacts, including friends, family members, and tow services.
3. Stay Calm: In case of an emergency, keep a clear head and avoid panicking.

By following these tips and having a solid plan in place, you can navigate car repairs and emergencies with confidence and ease.

This article provides a comprehensive guide to the financial benefits of car repair, budgeting for unexpected expenses, and preparing for emergencies. By understanding the importance of regular maintenance and having a contingency plan, you can save money and reduce stress in the long run.