One in four American drivers wouldn't have the funds available to pay a repair bill of $2,000. If the tally drops to $1,000, then one in eight drivers would still be unable to pay the mechanic. It's not like those totals are out of line for a major repair, either.
If you need transmission work done, you can quickly climb into the four-figure range. Engine work? Keep climbing. Don't forget about the rubber on the road either, as a new set of tires certainly starts in the low hundreds but rapidly rises into the low thousands for higher-performing hoops.
Because of the costs associated with maintaining an automobile, and given the current economic climate, a quarter of all motorists say they are neglecting needed repairs. The problem is, that could lead to a worse situation down the road.
How are you preparing for the unexpected? Are you hoping for the best or stashing cash just in case? Sound off in the comments.
Orlando, Fl - 8/3/2011
One quarter of American drivers neglecting car repairs and maintenance due to economy; More than half keeping older car to avoid financial burden of newer model
One in four American drivers could not pay for a car repair of $2,000 if faced with one today, according to the results of a survey released by AAA. The survey also found one in eight would be unable to pay for a repair bill of $1,000.
More than half of American drivers also said they are holding onto their older vehicle because they do not want the financial burden of a new one. And, one quarter of drivers admitted to neglecting repairs and maintenance on their vehicles in the past 12 months due to the economic climate, which AAA Automotive experts say can greatly increase the likelihood of their car needing a costly, major repair.
"Economic conditions have taken their toll on many Americans resulting in them neglecting their cars and leaving them at increased risk for very expensive repair bills," said Marshall L. Doney, AAA Vice President, Automotive and Financial Services. "Many Americans rely on their cars for their livelihood and losing access to them could be financially devastating during an already troubling economic time.
"It's important for drivers to not only continue to maintain their vehicles, but also have a financial emergency plan in place should they be faced with a sudden unexpected auto repair bill," continued Doney.
According to the survey, 38 percent of American drivers could pay for a $2,000 repair bill with funds in a savings account, while 20 percent would pay with their credit card. Eleven percent said they would have to borrow money from their friends, family, retirement or home equity in order to pay for a $2,000 repair.
Slightly more Americans reported being able to pay for a $1,000 repair bill with 46 percent saying they could use savings and 22 percent using a credit card. Fourteen percent would look to borrow from their friends, family, retirement or home equity.
AAA Automotive experts explain that a $1,000, $2,000 or higher repair bill can quickly appear – especially on older vehicles that have not been properly maintained. While repair costs can vary greatly by make, model and type of repair, a transmission repair can be $2,000 to $4,000, while an engine repair can exceed $5,000. Major brake repairs may range from $350 to $1,000, and a new set of tires can run from $300 to more than $1,000.
AAA offers several services to help members prepare for and save on costly repair bills including:
AAA Approved Auto Repair – AAA inspects and approves nearly 8,000 auto repair shops in the U.S. and Canada. Approved shops meet tough professional standards for customer service, cleanliness, equipment and training. All AAA members receive a free maintenance inspection upon request in conjunction with any other paid service. Additionally, many AAA Approved Auto Repair shops participate in the AAA Show Your Card & Save program, providing discounts on repair and maintenance to AAA members. A listing of nearby approved shops is available at AAA.com/Repair.
AAA Online Savings – AAA encourages Americans to have an emergency fund set aside for unexpected expenses such as costly auto repair bills. AAA offers an Online Savings Account through Discover Bank that provides easy access to funds in the event of an emergency. Additionally, the AAA Online Savings Account offers special AAA member-only interest rates, more than five times the national average, according to Informa Research Services, with interest compounded daily for maximum earnings. Members can open a AAA Online Savings Account at AAA.com/Deposits.
AAA Member Rewards Visa – For those who pay for auto repairs with their credit card, the AAA Member Rewards Visa® credit card offers members an opportunity to earn vouchers good towards auto repairs at AAA Approved Auto Repair facilities. In addition to 2,500 bonus points, members receive one point for every dollar they spend, with triple points on AAA and travel purchases and double points on gas, grocery and drug store purchases. Members can redeem as little as 5,000 points for a voucher good at any AAA Approved Auto Repair facility, allowing this month's repair bill to help pay for future ones. Members can apply for the AAA Member Rewards at AAA.com/CreditCard.
Some AAA products may not be available in all areas. Members should contact their local AAA club with questions about availability.
The telephone survey was conducted among a sample of 1,009 adults, 18 years of age and older, living in the continental United States. The survey has an average statistical error of ±3.6 percent at the 95 percent confidence level for all U.S. adults.