How to Prepare Financially for Car Problems

Unless you are purchasing a brand-new car that is under warranty, automobile repairs are inevitable. Not all car repairs cost the same. The question is, how can you prepare financially for car problems?

Create an Emergency Fund

The amount of money you can set aside for car repairs will vary. It depends on your income and the amount of debt you have. If you have debt, start by putting aside $1,000. Add a reasonable amount to that fund every month. The end goal is to have a fund that will cover all of your expenses, including unforeseen car repairs, for up to six months.

If you have an emergency fund, when the unexpected happens, you have a cushion. It prevents you from becoming financially derailed. You should remember that emergency funds do not happen by accident. You need to set aside funds in your budget specifically to protect you from the unforeseen.

Do Regular Maintenance to Minimize the Need for Repairs

Automobile emergencies are inevitable. However, you can minimize their frequency by doing regular repairs.

BMW repair West Chester PA professionals recommend performing basic maintenance to help keep your car out of the garage longer.

You should check your spare tire. It is a backup just in case you get a flat. If your spare tire is also flat, you will need to spend money to get your car towed.

Change your oil regularly. Oil problems are some of the most expensive car maintenance issues to fix. Oil impacts almost all of the functions of your car. It is better to spend $30 to get the oil changed instead of letting your engine parts wear out, which can cost you thousands of dollars.

Replace your air filter. The air filter keeps pollutants from entering through the vents. It has a critical job, so you want to treat it nicely. If you leave in an old air filter, you can have problems with your air conditioning system. Replacing your AC unit can run you anywhere from $1,000 to up to $4,000.

Check your coolant. Coolant affects your radiator, heater, water pump, and air conditioner. You don’t want to skip the maintenance on something that impacts so much of your car’s overall health.

Keeping up with maintenance is going to cost you some money. But it’s going to be a lot less expensive to do maintenance now than to pay for costly repairs in the future.

Create a Sinking Fund for Car Repairs

A sinking fund is different than your emergency fund. Your sinking fund is like a unique envelope in your budget where you continually put aside money to cover big purchases.

Putting aside money for car repairs is not enjoyable. If you own your car, take the money you would be paying in car payments and put it in your car sinking fund. That way, you already have the money set aside. You will not even feel its impact if you can set up automatic deposits into your sinking fund. When your car breaks down, you will be so happy that you have the money set aside to fix it.

Making an Accurate Car Repair Budget

Collect all of your car maintenance records for the last year. Take the total you spent on maintenance during the previous year and divide it by 12 to get your average expenses. If last year you spent $900, your budget should be $75 a month for car maintenance and repair.

Think about the condition of your car. If you have an older vehicle, you will probably need some serious repairs in the coming years. You should up your budgeted amount based on the age of your car. Some experts recommend that you set aside $100 per month for car repair and maintenance and then up the amount to reflect the actual condition of your vehicle.

Your maintenance and repair fund should be separate from other money. This money that you set aside is only for your vehicle.

The Joys of Car Ownership

Owning a vehicle is a lot of fun. It allows you to travel from one place to another easily. However, it entails a financial responsibility. Minimize the impact of unforeseen emergencies by planning. Set aside money that will serve as a cushion when automobile emergencies happen.

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