AAA has a new survey out this month illustrating the impact of the tough economic environment on car owners. The survey finds that 1 in 4 American drivers couldn't afford to make a car repair of $2,000 if they faced one today.
That finding is pretty troubling, considering how many car repairs can run that high, but it looks even worse next to the survey's other findings. From the press release:
More than half of American drivers also said they are holding onto their older vehicle because they do not want the financial burden of a new one. And, one quarter of drivers admitted to neglecting repairs and maintenance on their vehicles in the past 12 months due to the economic climate, which AAA Automotive experts say can greatly increase the likelihood of their car needing a costly, major repair.
"Economic conditions have taken their toll on many Americans resulting in them neglecting their cars and leaving them at increased risk for very expensive repair bills," said Marshall L. Doney, AAA Vice President, 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," continued Doney.
To be sure, there's nothing wrong with driving a car until the wheels fall off. Considering the incredible cost of depreciation, avoiding it by staying away from the car dealership is the best way to reduce your auto expenditures over the long term. And not having an auto loan payment is really nice, especially in an economy this unstable.
But the flip side of that long-term savings is you need to have cash on hand to make repairs when needed.
What do you think? Could you swing a major car repair right now?