AAA is now urging drivers to budget for unexpected car repairs.
A recent survey from the nonprofit federation of motor clubs found that 64 percent of American drivers would be unable to pay an unexpected car repair bill without racking up debt.
To avoid becoming part of that statistic, AAA recommends that you take the following steps before you run into an unforeseen car expense:
- Save at least $50 a month for unforeseen expenses, which is based on the average car repair cost — $500 to $600.
- Follow the manufacturer’s recommended maintenance schedule, which will help avoid roadside trouble.
- Find a repair shop you trust — you’ll find everything you need to know in “13 Steps to Find an Honest — and Qualified — Auto Mechanic.”
Once you run into car trouble, AAA recommends that you:
- Get a written estimate for the repair.
- Consider getting a second opinion.
- Negotiate the repair bill with the mechanic.
Last month, we reported that 37 percent of Americans could not pay for an unexpected medical bill of more than $100 without going into debt.
Last year, we reported that 48 percent of Americans don’t have enough cash on hand to cover a major purchase like a refrigerator.
Are you sensing a theme?
Build a budget
If you aren’t already tracking your expenses or budgeting for future ones, consider making that your first step toward planning for unforeseen expenses.
Money Talks News partners with the free budgeting service PowerWallet, and you can read more about budgeting on our site:
Build an emergency fund
As we recently noted in “Beware These 12 Common Money Mistakes,” you’re walking a tightrope without a safety net when you have no emergency fund.
Ideally, you should set aside enough money to cover your net income for seven or eight months. For example, if you earn $4,000 a month after taxes, your emergency fund should be $32,000.
But even a smaller amount of spare cash can still serve as a buffer when your budget suffers an unexpected expense. For example, a reserve of just $600 would ensure you could pay for the average unexpected car repair bill without going into debt.
To learn more, check out:
Could you cover an unexpected car repair bill without going into debt? Tell us about your strategy below or on Facebook.