Minimizing the Cost of Car Repairs
Skip the extended warranty and save your money strategically instead!
In never fails. Most vehicles tend to start breaking down right when the manufacturer’s warranty expires. Then you start getting calls from third-party extended warranty providers telling you that your vehicle is at risk of an expensive repair. They’re not wrong about the high cost of car repairs, but they are wrong about the cure. Most experts agree that saving money is a better strategy that using that cash for the extended warranty.
Turning your monthly payment into savings
At Consolidated Credit, we believe that saving money effectively is the key to avoiding debt. But that’s not always easy to do, especially if you’re like millions of Americans living on limited income. However, one easy trick is to treat savings like a bill that you pay yourself. And this is an easy transition to make once you pay off your auto loan.
This strategy works because it doesn’t require you to cut costs or find extra money for saving. You already had those funds allocated for something else – your car payments. So, immediately after you finish paying off your car, move the monthly payment to make a recurring transfer to your savings account.
This allows you to quickly transition the money you were using for your car payment to savings. The automatic recurring transfer makes the saving automatic, so you don’t have to think about it. And, since you do it immediately after you pay off your auto loan, you don’t have time to start using that money for other things.
Repair or replace… How do you decide?
First, you should regularly check the Kelly Blue Book value of your vehicle. Knowing how much the vehicle is worth can give you a helpful metric for deciding how much money to shell out on repairs. If your car is only worth $2,000 and the new transmission will cost $2,500, that repair isn’t worth it. You’re paying more to repair the car than it’s actually worth.
Also take things like total mileage on the vehicle and your driving habits into account. If you drive a lot and already have a high mileage on the vehicle, then you may not be buying that much time with an expensive repair.
Take advantage of cost-saving tricks when problems arise!
One useful trick that many people don’t take advantage of is the free diagnostic offered by most auto parts stores. If your check engine light comes on, your first instinct may be to immediately take it into the shop. But that means you’ll pay money before you even understand what’s wrong. Instead, head to an auto parts store and ask for a free diagnostic. They’ll tell you what triggered the check engine light.
Then, you can go online and look up the cost of repairing that part of the car. If the repair looks to be expensive, go check Kelly Blue Book for the value of your car and go from there.