How Much to Save for Car Repairs

Car repairs can be expensive and unpredictable, but planning ahead can save you from financial stress. Here’s what you need to know:

• Average Annual Costs: Australian households spend around $1,872 annually on tyres and servicing.

• Common Repair Costs: Basic services cost $220-$245 every 6 months, while major repairs like clutch replacements can range from $900 to $2,000.

• Inflation Impact: Car maintenance costs rose 36.2% from 2019 to 2024.

• Savings Guide: Save monthly based on your car’s age:

  • 1-3 years old: $40-$65/month

  • 4-6 years old: $65-$100/month

  • 7+ years old: $85-$170/month

• Prevention Pays Off: Regular maintenance (e.g., oil changes, brake inspections) reduces the risk of costly repairs.

Quick Tip: Set up a dedicated repair fund and automate monthly contributions to stay prepared for unexpected expenses. Use financing options like Ausloans if repair costs exceed savings.

Planning ahead ensures your car stays reliable without draining your wallet.

How to Save For Car Repairs

Calculating Future Repair Costs

Planning for car repair expenses means considering a few key factors. Recent figures reveal a 36.2% rise in average car maintenance and repair costs from January 2019 to January 2024[1]. Another important element is how your car's age and condition influence these costs.

Impact of Car Age and Condition

The age and upkeep of your vehicle heavily influence repair needs and expenses. Older cars, especially those over a decade old, are more likely to require repairs for major components like the engine, transmission, or suspension. Routine maintenance, such as oil changes costing between $100 and $200, helps prevent more expensive repairs down the line.

Standard Repairs and Their Costs

Having a clear idea of common repair costs can help you budget effectively. In Australia, here’s what you can expect for some typical repairs:

Your actual costs will depend on factors like your car's make and model, driving habits, exposure to weather conditions, yearly mileage, and how consistently the vehicle is maintained.

Setting Up a Repair Fund

Setting aside money for repairs helps you avoid financial surprises when something goes wrong with your vehicle.

Monthly Savings Goals

Once your repair fund is set up, establish clear monthly savings goals based on your car's age and expected maintenance costs. Here's a breakdown:

• Newer vehicles (1-3 years old): Save $40-$65 each month to cover annual costs of $500-$750.

• Used vehicles (4-6 years old): Put aside $65-$100 monthly to handle yearly expenses of $800-$1,200.

• Older vehicles (7+ years old): Plan to save $85-$170 per month, as annual costs can range from $1,000 to $2,000 or more.

Building a Dedicated Repair Fund

Create a separate savings account specifically for vehicle repairs. Automate monthly transfers to ensure consistent contributions. Opt for an account with a decent interest rate to help your savings grow over time. Start with at least $50 per month and adjust as needed based on your car's age and repair history.

Here are a few things to consider when building your fund:

• Vehicle History: Take a look at past repair costs to estimate how much you’ll need.

• Seasonal Maintenance: Plan for routine services like brake pad replacements (typically $200-$500) and tire rotations.

• Emergency Buffer: Add an extra 20% to your estimated yearly costs for unexpected repairs.

If repair expenses exceed what you've saved, Ausloans offers flexible financing options through their network of lenders. This approach ensures you're prepared for repairs without disrupting your overall financial goals.

Paying for Car Repairs

Ways to Cover Repair Bills

When faced with car repair costs, there are several ways to handle the expenses. Start by using your savings if possible, but if the bill is too high, consider other options:

Ausloans provides auto repair financing through a network of 40+ lenders. Their Zink platform uses AI to find loan options that suit your needs - without affecting your credit score.

While payment options help in the short term, keeping up with regular maintenance can save you from expensive repairs down the road.

Regular Maintenance to Reduce Costs

Routine maintenance is key to avoiding hefty repair bills. By addressing small issues early, you can prevent them from turning into major problems.

Here’s a basic maintenance guide:

• Oil changes: Every 10,000 km or 6 months

• Tire rotations: Every 10,000 km ($50–$75)

• Basic inspections: Annually ($150–$250)

• Air conditioning service: Every 2 years ($125+)

• Brake inspection: When wear indicators are noticeable

Maintenance costs can vary depending on your car's brand. For example, Honda owners typically spend around $583 per year, while Land Rover owners may pay an average of $1,599 annually.

"Regular maintenance helps identify and address potential issues before they become major repairs", says a senior mechanic at NRMA. "Following the manufacturer's recommended service schedule can extend your vehicle's lifespan and significantly reduce the likelihood of costly repairs."

Extra Cost Protection Options

Adding extra cost protection options to your repair fund strategy can help shield your budget from unexpected, hefty expenses.

Warranty and Repair Coverage Plans

Warranty and repair plans vary based on your vehicle's age and condition. New cars often come with manufacturer warranties that cover major mechanical components for a set period. Once these expire, extended warranties can take over, costing anywhere from a few hundred to a few thousand dollars. For older vehicles, third-party repair insurance plans often provide more tailored options.

For example, replacing a transmission can run between $3,000 and $9,000. A warranty can help mitigate such high costs. However, it’s crucial to go over the coverage terms and exclusions thoroughly before committing. If gaps exist in a warranty plan, repair financing services can step in with flexible solutions to help cover those expenses.

Repair Financing Services

When warranties or insurance don’t cover everything, financing can be a practical way to handle repair bills. Ausloans, for instance, connects customers with over 40 trusted lenders to find competitive loan options. Their Zink platform evaluates loan eligibility without affecting your credit score and provides:

• Fast assessments with no impact on credit scores

• Access to multiple lenders for better rates

• Flexible payment terms to suit your budget

• Expert support throughout the process

In Perth, routine servicing typically costs between $250 and $400, but major repairs can climb into the thousands. Financing options can help you manage these expenses without draining your emergency savings or resorting to high-interest credit cards.

When choosing protection plans or financing options, consider your vehicle’s age, condition, and your financial situation. The key is finding a balance between manageable monthly costs and sufficient coverage for major repairs.

Conclusion: Planning for Car Repairs

When it comes to car repairs, plan according to your vehicle's age, condition, and how often you use it. On average, Australian households spend about $1,872 annually on tyres and servicing, making financial preparation essential.

Setting aside modest monthly savings can usually cover routine maintenance for well-kept cars. However, if your car is older or has higher mileage, you may need to allocate more as repairs tend to be more frequent and expensive.

A solid repair strategy includes a mix of preventive maintenance (typically $150-$250 for basic checks), an emergency fund customized to your car's needs, and financial protection measures. These steps ensure you're ready for any unexpected repair costs.

To strengthen your plan, consider financing options for unexpected expenses. Flexible solutions, like Ausloans' Zink platform, provide access to competitive loan offers without affecting your credit score, helping you manage surprise repairs without straining your budget.