Many can’t afford a surprise $400 repair bill.
While the cost of buying a car keeps rising, Americans are getting better at paying their notes on time.
Credit Bureau Experian’s research found delinquency is on the decline: Payments that are between 30 and 60 days late both decreased on average since last year. And that’s while the loan amounts are up…
- Borrowing for a new car costs $700 more on average since last year
- And borrowing for a used car costs $540 more.
“As we monitor the health of the automotive market, delinquencies are one of the most telling metrics,” says Melinda Zabritski, an Experian director. “If this downward trend continues, it can be an encouraging sign.”
Get yourself on a budget before you start saving money – you may be able to save more money than you think! Here’s a quick way to get started.
But if something goes wrong with their cars, nearly half of Americans could face a stark reality. Financial services company Ally says federal data shows that when faced with a $400 emergency expense…
- 41 percent of adults said they couldn’t pay it
- Or that they’d be forced to borrow or sell something to cover it.
And something’s likely gonna go wrong
Most of us are going to get squeezed for major car repairs before long.
Ally’s researchers asked 2,000 people about their repair needs. More than half of them (51 percent) said they paid for “major vehicle repairs” in the last five years, and they shared what it cost…
- Four in five (80 percent) said they spent $500 or more
- 58 percent said at least $1,000
- And one in three (33 percent) said they spent $2,000 or more.
“Expensive car repairs can cause serious financial stress, especially for those with little or no emergency savings,” says Mark Manzo, Ally’s president. “Most major vehicle repairs come unexpectedly, and standard insurance policies usually only cover repairs in case of accidents.”
Before you fix…
It could be wise to follow some easy and cheap routine maintenance for your wheels to hold off its next repair.
For one, you could be less aggressive, avoiding jackrabbit starts and hard braking. Additionally, you should be sure to rotate and keep your tires properly inflated. Here’s the rest of a car self-maintenance list anyone could follow, even an “auto idiot.”
And if you have to take your car in and the bill’s eyebrow-raising, you have options. The Automatic Transmission Rebuilders Association built a fix-it-or-trade-it calculator.
It asks about your driving and gas prices, about your current car, and about a hypothetical new car — including side costs like insurance and interest rates on financing. It’ll crunch and compare the data to give you some perspective — but definitely ask your friends, too.
Before you buy…
When the time comes to buy a new car, do your homework first.
For starters, you’ll be better off if you have lots of cash — unfortunately, 2018 isn’t really the year to finance a car. There is that significant increases for total costs Experian found. And Edmunds, a car-shopping website, says interest rates on auto loans are at a nine-year record high
As Debt.com reported, “car makers offer zero percent interest loans, because they still get paid what the car is worth … However, most borrowers don’t actually qualify for zero percent loans.”
But sometimes the itch is too strong and you have to scratch. We get it.
If that’s the case, check out our 7 Easy Ways to Save When Buying a Car, where you can actually find some good tips on figuring out what car you need in the first place.
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Article last modified on November 5, 2018 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Americans Can Afford Cars… That Don’t Break Down - AMP.