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How to Afford Your Next Trip to the Mechanics

Are expensive auto repair bills breaking your budget? It doesn’t have to be that way. Follow this guide to prepare your finances for a costly trip to the mechanic     .

Make an Auto Repair Fund

An auto fund is a simple way to have some cash set aside for routine tune-ups and unexpected repairs.

Although it may be a challenge to contribute to this fund every paycheck, it’s possible — even if you’re living on a tight budget.

How Much Do You Need for Your Repair Fund?

There’s no hard and fast rule about how much you should save for your car. The answer depends on the age and condition of your vehicle, as well as how often you drive.

As a general rule, however, most people should budget for $1,200 – $2,000 each year. At most, this breaks down to around $167 a month.

Does this sound like a lot of money? You might be surprised by how easy it can be to save this much every month.

The average person spends roughly $250 a month on takeout alone. By reducing how often you call out for pad Thai or pizza, you could have what you need without much work.

Don’t Touch This Money

The money you save in an auto fund is reserved for maintenance and repairs. Try not to dip into it to cover other expenses.

This habit can empty out your fund, leaving it empty when you need to pay for a costly repair.

Keep saving even if you don’t experience a lot of repairs. Left untouched, your fund will grow until it’s big enough to cover a major mechanical issue. It may even be enough to help you purchase a new car.

What If You Fall Short?

Sometimes, you won’t be able to keep up with repairs, even with an auto fund. Bad luck and careless driving can result in more accidents and greater wear and tear that require costly repairs.

If you ever find yourself low on funds at the same time you’re expected to pay a huge bill, check in with an online installment loans direct lender. These lenders offer quick and convenient installment loans online, so you can take on emergency repairs without delay.

Apply the 50 Percent Rule

These guidelines work best when you’re driving a car that’s relatively new. A newer car will cost less because:

  • It may still be covered by a warranty and free-maintenance periods
  • It has less wear and tear and mileage

Once you surpass the grace period and begin to accumulate miles, your car gets more expensive to maintain. In some cases, the costs increase as soon as it’s more than 3 years old.

Eventually, there comes a tipping point when it won’t be cheaper to maintain an older model than to buy a new one.

Most people suggest rethinking repairs once they get close to 50 percent of your car’s estimated resale value. At that price, these repairs may not be worth it.

The average new car costs more than $34,000, so this isn’t a simple decision. If you’re in the market for a new car, you’ll want to weigh the benefits of owning vs leasing your vehicle to make sure you find the best option for your finances.

Before you go shopping for a new car, take some time to sit down with your finances. A little effort rearranging your budget can help you set up an auto repair fund. This preventative savings account can help you take on costly repairs in the future.

 

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