Aug. 5, 2011 — One in four Americans could not afford a car repair of $2,000 if faced with one today, according to a new AAA survey.
Survey results also showed that more than half of American drivers said they are holding onto their older vehicle because they do not want the financial burden of a new one. One quarter of drivers admitted to neglecting repairs and maintenance on their vehicles in the past 12 months due to their finances, which according to AAA Automotive experts, can greatly increase the likelihood of their car needing a major repair.
“Economic conditions have taken their toll on many Americans, resulting in them neglecting their cars and leaving them at increase risk for very expensive repair bills,” said Marshall L. Doney, AAA vice president of 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.”
Additional survey results said 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. 14 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 $5,0000, and a new set of tires can run from $300 to more than $1,000.
