Around 43% of Americans have admitted going into debt after experiencing car trouble because they didn’t have the money readily available to pay for car repairs. Illustrating the potential worth of the best extended car warranties (opens in new tab) - which will help cover the cost of certain auto repairs - 28% of drivers also told LendingTree that they would not be able to make a $500 car repair without going into debt. And in a worrying admission from a safety perspective, 58% of motorists admitted that they had skipped a necessary car repair because they couldn’t afford it.
“These people may have to make a choice between fixing their car and affording other monthly expenses, like groceries and rent,” said Erika Giovanetti, writing about the research (opens in new tab) for LendingTree. “While it’s not an ideal circumstance, our data shows that this is far more common than you may think. Ignoring repairs may make your vehicle unsafe to drive, or at least make the problem more expensive to fix down the road.”
How are drivers paying for their repairs?
For those who’ve had no choice but to fix their car, the survey found that around a third of drivers (32%) would use cash or checking accounts to cover the cost of the repair, and that one in five (20%) would take money from their savings.
But while car repairs are precisely the type of situation that an emergency fund is designed to cover, not everyone has savings that they can fall back on. As a result, more than a quarter of motorists (27%) said they would be forced to charge their credit card (opens in new tab) to cover the cost of their repairs, while 4% would turn to the best personal loans online (opens in new tab).
How COVID-19 has impacted car use
While car use slumped dramatically at the height of the coronavirus lockdown earlier this year, as the economy emerged from its hibernation, vehicles increasingly returned to the road.
What’s more, with the pandemic and its associated health risks still a major concern, many people are preferring to use their own mode of transport than use public service such as buses and trains. In recent months, car sales in the US have been recovering strongly (opens in new tab) from the shallow numbers seen earlier in the year as a result. That the interest rates on the best auto loans (opens in new tab) are currently low by historical standards is helping to encourage people back to the showrooms too.
With people working from home more and generally traveling far less because of health worries too, many motorists also appear to be realizing that a second-hand car is adequate for their motoring needs right now. It’s therefore unsurprising that sales of used cars have grown sharply (opens in new tab) since the pandemic struck too.
How to guard against auto repair bills
While buying a cheaper car second hand now makes sense for many motorists, it’s vital to guard against the potentially higher repair bills that owning a used car rather than a new one is likely to bring.
If the car you own or are thinking of buying is more than two years’ old, it’s possible that the manufacturer’s warranty will have expired, and it will be up to you to cover the cost of any repairs that might arise. Check your car’s service book or with the dealer to see where you stand with the original warranty - sometimes they expire once a certain amount of miles has been reached too - and then think about taking out an extended warranty if it has expired or will soon.
As extended car warranties only cover repairs and replacements for wear and tear and breakdowns that come from normal use, it’s vital to have the best auto insurance (opens in new tab) as well, in case you have an accident.
And the other safeguard that most motorists are advised to consider, especially if they have an older car, are the best roadside assistance services (opens in new tab). Reliability might never have been an issue with your car before, but breakdowns can occur when you’re least expecting it and at the most inopportune of times. If there’s a choice between a long and uncomfortable roadside wait to be rescued or a quick and efficient recovery when you encounter motoring trouble, the latter is almost certain to be most people’s preferred option.
Find extended car warranties at Auto Warranty Connect (opens in new tab)
If you want to guard against the financial worries of motoring breakdowns, Auto Warranty Connect is the simplest way to find the best extended car warranties.