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Car repairs suck, especially when you have no money to pay for them.

And since you can’t predict when car troubles are going to pop up, it’s best to have a plan to avoid going into debt to pay for car repairs. I’m all about finding ways to avoid debt and I want to help you do the same.

A 2020 survey from Lending Tree found that 43% of Americans have gone into debt from car repairs. Diving a little further, 28% of people surveyed wouldn’t be able to cover $500 of car repairs. That can be a recipe for disaster and thousands of dollars of debt over car repairs.

Read that again 👆🏻

The good news is, there are a bunch of ways to avoid car repair debt. And if you’ve gone through all the work of getting out of debt with a debt snowball spreadsheet, having a plan for paying for car repairs is a MUST to stay debt free.

Each of these car repair tips require some research and effort, but if you do it right, you can save a bundle on your car expenses.

Explore Options for an Extended Warranty

One way to reduce the cost of auto repairs is to get an extended warranty from a trustworthy company. If you’re not sure where to find extended warranties or which companies to trust, consider reviews of CARCHEX. The reviews compare terms of coverage and cost. 

Thankfully, extended warranties are not the only ways to protect your budget when it comes to car care.  

Pre-Pay for Your Repairs

If you’re buying a used vehicle from a dealership, consider prepaying for your maintenance plan. A prepaid maintenance plan typically covers routine maintenance like oil changes and brake pads on vehicles with an expired or void factory warranty.

Each maintenance plan will differ depending on the dealership and the type and age of the vehicle. Be careful before you sign on the dotted line, however, and make sure these maintenance plans are worth your money.  

Keep in mind that if you roll your maintenance plan into your financing agreement, you may end up paying interest on the repairs as well as the vehicle itself. 

To see if a prepaid maintenance plan is right for you, check the following factors:

What does prepaid maintenance cover? 

Just like a factory or extended warranty, prepaid maintenance plans will cover specific maintenance and systems for a certain number of years or miles. Get a list that shows you exactly what the plan covers and what you must pay for out of pocket.

How Much does the Prepaid Maintenance Plan Actually Cost? 

Make sure that the price of a prepaid maintenance plan doesn’t offset the cost of regular maintenance. Usually, these plans are offered at a discount, but you should always check the price before deciding which way to go. 

Another way is to shop around for maintenance quotes then pitch your offer to the salesperson. You may end up getting a better deal if you do your research. At the very least, you will know whether your maintenance plan is a good use of money.

It’s always a good idea to walk into a dealership with a plan and lots of research. And remember, everything is a negotiation when buying a car.

Where Can You Use a Prepaid Maintenance Plan? 

Chances are, if you’re buying from a dealership, your maintenance plan will be good at all locations of that same dealership. But, if you purchased from a smaller shop, be sure you know where you can take your vehicle for its regular maintenance. 

Keep in mind how convenient this will be for you. Check around to see how busy or far away the referred shop is.

Keeping regular maintenance on your car not only lets it hold value but also means bigger repairs can be detected sooner and maybe even prevented. Prepaying will take the hassle out of having to plan for car expenses.

Prepaid maintenance plans can be easier on your schedule. You will likely get appointment reminders to take in your car instead of having to rely on your memory or odometer.

Create an Automotive Sinking Fund

One of the best ways to prepare for unexpected maintenance is to create an automotive sinking fund

A sinking fund is designed to slowly save money for a financial goal by saving small amounts every month. It can be as small as $50. Over time you’ll create an automotive emergency fund so you can pay for car repairs with cash. 

You could even create an automatic transfer to your savings account each paycheck and store your car sinking fund there. You won’t even notice the money is gone.

Sinking funds require a monthly commitment to grow so set a date and target amount to keep yourself motivated. For example, “I want to grow my sinking fund to $1,500 in the next 10 months”. Then commit to saving money every month in your new car repair sinking fund.

Keep your goals realistic and attainable. But feel free to stretch yourself a little and commit more while you’re energized about saving.

Saving up money for car repairs is smart for several reasons. 

First, it takes the sting out of having to pay for unscheduled maintenance out of pocket. This is especially challenging if you’re in between paychecks or it seems like you have no money. Second, building your car repair savings can also keep you from putting expensive car repairs on a credit card. You can also avoid loans to pay for your car repairs.

The goal is to avoid car repair debt. Saving money for car repairs in advance is a great way to do that. Grab my sinking fund tracker to help.

Get my Sinking Fund Tracker for $10 and save money for car repairs

Learn Simple Car Repairs and DIY to Avoid Car Repair Debt

If you’re fortunate enough to have a mechanically savvy friend, call on him or her for simple repairs and maintenance. 

Remember, doing maintenance yourself can void a warranty, so be sure to check the terms before you rip anything out. 

Ask for help changing the oil or brake pads. You can also learn to do it yourself with your friend’s help, or come to a financial agreement with him or her.

There are plenty of simple maintenance tasks that anyone can do with guidance and patience. It can save you money to learn to do your own car repairs or to pay a friend to do these but keep in mind the expert knowledge you will get with a certified mechanic. Depending on your friends’ credentials, you may want to bring bigger repairs to a professional.

Find a Mechanic You Trust

Find a mechanic you can trust either at a dealership or shop or in your neighborhood. A trustworthy mechanic is a dream come true, so don’t be afraid to shop around until you find someone who you trust to be honest and take care of your car repairs.

I will always be happy about our mechanic. He’s the absolute BEST!

He is up front, honest, and explains car repairs and car problems in a simple, easy to understand way. Plus he helps us focus on only the problems at hand instead of inventing new problems for us to pay for. He’s even told us to wait on repairs instead of spending more money, which seems counter to many of my friends’ experiences with car repairs.

Your mechanic should be the first line of defense when you have questions about your car. Maintaining a pristine car maintenance report will help your car retain value as well as let you know about impending repairs sooner rather than later. Some problems can be fixed or even prevented by regular maintenance.

Whoever you decide to trust for car repairs, make sure he or she is certified for your car and a licensed mechanic. Sometimes the best mechanics can be found at the dealership, but they have a higher price tag.

Try Your Local Auto Mechanic Trade Schools

Trade schools and specifically auto mechanic schools are always looking for real-world customers for their students to practice with. Consider taking your vehicle to a local trade school that can provide low-cost repairs for your car.

Most schools are heavily discounted for the work their students perform, but supervision by accredited instructors is always present.  This can be a great way to save money on your car repairs and regular maintenance as long it doesn’t void any warranty or protection plan you have in place.

Along with maintenance, you may be able to get discounted parts at trade schools or pull yards. Again, make sure no warranties are voided by your actions. 

Say your alternator goes kaput. Chances are you can find a cheaper part online or locally than you can get it at the dealership. Save even more money by having trade school students install your new alternator.

Even a local high school can give you a free “check up” for your car so you can analyze the repairs and maintenance your vehicle needs and start planning how to pay for them. It’s a win for students to learn and get hands on experience, and you get a solid idea of upcoming maintenance and repair costs for your car.

Shop Around for Repair Quotes

It may take more time, but if you’re looking to save money, shopping around for repair quotes is a good use of your time. 

Make sure you know which part of your car needs to be repaired, then call a few dealerships or shops and ask what their prices are on your parts or service. Make sure to get the shop price and the labor price so you have a comprehensive idea of what you will be paying for.

Keep in mind that car repair quotes are never set in stone.  Dealerships tend to charge the highest rates, but they also often have the best technicians. A good mechanic is worth spending a little more on. Once you’re armed with your quotes, you can negotiate with the shops to lower the costs even more in some cases.

Websites like Kelley Blue Book can give you several local options to contact or check out. Sometimes you can even get a quote online.  This will at least give you an idea of where you can take your car and how convenient each shop is to where you live and work.

The Importance of Avoiding Car Repair Debt

Staying out of debt is essential to leading a stress-free life. Debt and interest payments tend to drain your cash, too, so it’s best to break the cycle as early as possible.

If you’re constantly going into debt over car repairs, it’s time to make a few changes. Start with your car repair sinking fund and implement the other strategies I mentioned to save money and avoid debt. 

When you go into any kind of debt, you’re taking time, money, and energy away from your other big life goals and fully enjoying your life. 

If you need some encouragement to avoid car repair debt, read about why it’s a great plan to ditch your car payment for good.

Our budget and goals changed our lives and it can change yours too.

6 Ways to Avoid Car Repair Debt and Save Money on Repairs6 Ways to Avoid Car Repair Debt and Save Money on Repairs6 Ways to Avoid Car Repair Debt and Save Money on Repairs

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