Some auto problems are minor and don’t cost much to fix. But other issues are quite significant, and whether you choose to tackle projects yourself or take your car to a mechanic, they can cost you substantially more. When major components or systems break, vehicle owners are often forced to figure out how to pay for the repairs.
After all, many people don’t have thousands of dollars in the bank to get a motor replaced or have a transmission rebuilt. That’s why consumers resort to incurring debt to pay for auto repairs.
For instance, some individuals turn to credit cards to cover repair costs. Sure, your vehicle will get what it needs going this route, but if you can’t pay more than the minimum monthly payment, expect to pay back more than you borrowed because of interest.
Of course, there are other ways to use debt for auto repairs. For example, you could take out a loan from your bank, obtain a title/payday loan from a company, or finance repairs through a local mechanic shop. But there are downsides with those options.
You might need to put something up as collateral to get approved for a loan. Then, if you miss one or more payments, the business may take your belongings. So, why not avoid all these hardships by not using debt to pay for auto repairs?
The first step to help you accomplish that feat should be to obtain a car warranty.
Find The Best Extended Car Warranty
You can purchase extended car warranties from vehicle manufacturers and third-party sellers. No matter the direction you’re leaning, take the time to research warranty companies.
First, look at the Better Business Bureau website to see how particular businesses have done with customer complaints over the years. It might also be beneficial to examine reviews on Yelp. This will allow you to see what others are saying about a company before you decide to do business with it.
Once you finally locate the warranty you want, don’t forget to check how much your deductible is. The deductible is the amount you’ll pay before the contract kicks in. Typically, most car warranty companies have a $100 deductible. As such, you’ll spend $100 at the time of service and no more, no matter how expensive a part is or how labor-intensive a job is.
In addition, examine the coverage thoroughly ahead of handing over your hard-earned cash. That will ensure the warranty meets your specific needs and demands. The coverages will vary with the company and the options you choose, but some of the most common types of car warranties available include:
- Bumper-to-bumper warranty
- Powertrain warranty
- Hybrid vehicle warranty
- Federal emissions warranty
- Safety restraint system warranty
Is Mechanical Breakdown Insurance Right For You?
As the name implies, mechanical breakdown insurance covers various mechanical breakdowns. So if you don’t want to use debt to pay for auto repairs, this could be the perfect alternative. Car insurance will most likely pay to fix your vehicle after an accident, but what about when there isn’t a crash?
For instance, what if your engine goes kaput and black smoke begins billowing out from beneath the hood on your way to work one morning?
When such scenarios arise, an MBI policy will take over. Of course, what your actual plan covers may vary, so always read the fine print. However, typical items covered by mechanical breakdown insurance are transmissions, brakes, valves, timing gears, electrical systems, and oil pumps. Unfortunately, this type of insurance isn’t available for every car. For your vehicle to qualify, it will need to be brand-new or show a certain number of miles on its odometer.
As with an extended car warranty, there is a deductible with a mechanical breakdown insurance policy. So, keep that in mind and find out how much it is upfront. That will ensure you aren’t caught off guard when the time to pay for services arrives.
Start Saving for Auto Repairs Today
Saving money isn’t the easiest thing to do. However, you shouldn’t feel alone if you don’t have much cash tucked away.
According to a recent study, less than half of Americans have the savings to cover a surprise expense of $1,000. That doesn’t mean it is impossible to save, though. People put cash back all the time, and if you don’t want to use debt to pay for auto repairs, now is the perfect time to act.
Even if it is only $10 to $20 per paycheck, all of that will eventually grow into a nice little nest egg. When a car’s engine blows, different things like what size, motor, and mechanic you use will determine how much you’ll pay for the powertrain replacement. But normally, the price for such a service will run between $1,000 and $4,000.
That’s a lot of money to come up with on short notice. Hence, don’t delay and merely hope for the best, as that could cause you a lot of grief in the long run. Instead, begin saving for costly auto repairs now and spare yourself from the headaches once breakdowns occur.
Do-it-yourself Auto Repairs
Another way to not use debt to cover auto repairs is doing them yourself. If you are a hands-on type of person who doesn’t mind getting dirty, you could save a bundle on labor costs with a DIY approach. You can also shop around brick-and-mortar and online auto parts stores to save even more. You could even resort to salvage yards.
By ensuring the repair price doesn’t get out of control, you won’t have to use debt to pay for it.
Many auto repairs are expensive, and people don’t always have the money when problems occur. After all, things like to happen at the most inopportune times. For example, car owners who live paycheck to paycheck can see their cars run hot and blow their head gaskets. But you can avoid that fate by taking one or more of the measures discussed here. So, what are you waiting for?
Get your car warranty, begin saving, look into mechanical breakdown insurance, or do something else. Just be sure to take action so that you aren’t faced with financial challenges when breakdowns happen.
Even if your car is new, those manufacturer warranties won’t last forever. They’ll eventually expire, and you’ll definitely want to be prepared to handle auto repair costs without turning to debt when that happens.