It’s the nub of the automotive repair industry’s biggest challenge in the U.S.: economic pressures that are causing financial constraints among motorists.
According to a survey by the American Automobile Association (AAA), one in four motorists could not pay for a car repair of $2,000 if faced with one today. One in eight would be unable to pay for a repair bill of $1,000.
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.
"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’s vice president of 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," Doney said.
According to the survey, 38 percent of American drivers could pay for a $2,000 repair bill with funds in a savings account, while 20 percent would pay with their credit card. Eleven percent said they would have to borrow money from their friends, family, retirement or home equity in order to pay for a $2,000 repair.
Slightly more Americans reported being able to pay for a $1,000 repair bill with 46 percent saying they could use savings and 22 percent using a credit card. Fourteen percent would look to borrow from their friends, family, retirement or home equity.
AAA Automotive experts explain that a $1,000, $2,000 or higher repair bill can quickly appear – especially on older vehicles that have not been properly maintained. While repair costs can vary greatly by make, model and type of repair, a transmission repair can be $2,000 to $4,000, while an engine repair can exceed $5,000. Major brake repairs may range from $350 to $1,000, and a new set of tires can run from $300 to more than $1,000.
The telephone survey was conducted among a sample of 1,009 adults, 18 years of age and older, living in the continental United States. The survey has an average statistical error of plus or minus 3.6 percent at the 95 percent confidence level for all U.S. adults.