Can’t Afford Car Repair? Here’s What to Do
The biggest financial mistake people make on their cars isn’t necessarily spending too much. It’s making a financial decision out of desperation.
If you can’t afford an expensive car repair, don’t immediately borrow money or replace the vehicle. First determine whether the repair is urgent, get a second opinion, compare repair prices, prioritize the work, and compare the total cost of keeping your current car with the total cost of replacing it.
When you depend on your car to get to work, or for your work, the fear can give you tunnel vision. You might find yourself thinking, “I need to get a working car no matter the cost.” But that decision might land you in a financial trap like a car payment or car repair financing that you can’t afford. Here’s exactly how to slow down, make the best choice, and get back on the road.
Don’t Panic
When you’re in a situation where you can’t work because your car broke down, your instinct is to do whatever it takes to get it repaired or replaced. This is exactly when you need to slow down and consider your options.
Do not let your car emergency turn into a car payment emergency!
Consider Your Options
Many people believe that it is impossible to get around without a car, however, millions of people manage this all over the world. I have talked to many people who even call in sick when their car is in for repairs. Don’t let your car start killing your paycheck like that! If you expect to earn more in your shift than it costs to get to work, make it happen without your car while you get the situation resolved.
- Ask a friend, family member, or coworker for a ride
- Borrow or rent a car
- Use public transportation
- Use rideshare apps or taxis
- Walk or bike
- Use a mechanic that provides rides or a courtesy car
Make Sure the Repair is Actually Necessary
When your mechanic drops the bomb that your car is going to cost thousands of dollars to get back to the road, don’t treat this as absolute truth. You need to find out for yourself, not immediately agree to costly repairs or buy another car you can’t afford (and that will also need its own repairs).
- Ask them what happens if you don’t fix it immediately
- Ask them whether the vehicle is safe to drive
- My favorite question: how many miles can I drive the car before this repair becomes urgent?
- The most important question:ask for the diagnosis in writing
The last time I was at the shop, the mechanic told me it was time for new brakes. I asked him how long I had left with the old brakes—and he told me 5,000 miles. That’s at least a couple months of time to save up for most drivers! And in that time period I found another shop that would do the brakes for much cheaper than my normal one.
Get a Second Opinion
Your number one priority with choosing a mechanic is making sure they do honest work and charge fair prices for it. Here’s where question 4 from the previous section is going to save you a lot of cash: use your mechanic’s statement of the recommended repairs to get pricing from other mechanics. Comparing prices is much easier today than it used to be because many mechanics charge flat-rate prices from a list—when you tell them what kind of vehicle you have and what work it needs, they can tell you quickly and easily over the phone how much it will cost.
Suppose your mechanic says your car needs repair. When you have their estimate in front of you, you can call other shops in town and give them your car’s make, model, and year as well as the list of repairs, and compare prices. When I recently had the brakes done on my car, my regular mechanic quoted me $1,600 but was nice enough to let me know that I had about 5000 miles left to come up with the money. However after getting the list of recommended repairs (which included brake pads, rotors, and calipers on both rear wheels) and calling other shops, I found one that would do the same job for $900. The extra $700 stayed in my bank account!
Now, I wouldn’t go so far as to say the expensive quote was a scam. The expensive shop offered me rides to and from work while the car was being worked on, which might be a good value if I needed it!
Prioritize Repairs
This week I talked to someone who had a whole lot of issues with their car that had piled up. It needed brakes, exhaust work, an oxygen sensor, and had a couple lights on the dash that might have been lit for those issues or might have been pointing to other issues. They were anxious! But their mechanic let them know that only the brakes needed to be done immediately and they had a few months to sort out the other problems—and save up to fix them.
You can do that too. Ask your mechanic which category the repairs fall into:
- Don’t drive without fixing this!
- Fix this within the next month
- This can wait a few months
- This is cosmetic or optional
A previous car had a noisy creaking sound coming from the back wheels. The mechanic said it was the rear struts and gave me a price to replace them. But he also said that for this particular car the repair wasn’t a safety issue and I could safely drive my creaky car. I kept those creaky struts until the day the car went to the junkyard! And I kept going back to that mechanic, too!
Be Careful How You Pay for Repairs
Some mechanics offer financing, and there are also plenty of drivers who pay for repairs using credit cards or payday loans. This is dangerous! If you can’t afford the repair, borrowing money may be reasonable but borrowing money without knowing how you’re going to pay it back is a problem.
Here are the top 5 ways to pay for car repairs without paying predatory interest rates and fees:
- Use cash you already have and reduce your other expenses
- Delay a non-urgent repair to save up money
- Find a mechanic that offers a no- or low-cost payment plan*
- Borrow from low- or no-interest sources such as a credit union, friend, or family member*
- Get a credit card with a 0% introductory offer*
*Read the terms carefully—”no interest” doesn’t necessarily mean “no fees” and some forms of financing have steep penalties for missed payments. You still need to have a plan in place to pay what you owe by the time it’s due!
Don’t Automatically Replace the Car
I know we all think the same thing when we get a repair bill in the thousands of dollars: “if I bought a nice, reliable, gently-used car I could stop paying for these repairs.” This is not necessarily true!
If your old set of wheels is going to cost you $1,000 or $2,000 or $4,000 it might sound insane compared to the repairs your nice gently-used car would have. But have you added up all the costs of financing that car?
- Down payment
- Monthly payment
- Taxes
- title/registration
- Insurance
- Dealer fees
- Interest
- Depreciation
- Repairs!
Kelley Blue Book says the average trip to the mechanic costs $838. Forums like Car Talk estimate you should budget $500-1,500 for repairs when you buy a used car. My most recent car purchase needed those brakes when I bought it—$900—they were right on the money!
Consider a favorite example of a car that “stays out of the shop”: the Toyota Corolla. On Carvana, I found examples of 2014-2019 models priced at $14,000-20,000. After tax, title, registration, dealer fees, and downpayment, the up-front costs of that car might be in the same ballpark as your repair—but then you’re on the hook for a car payment between $300-400 every month (financed over 48 months at 6% in this example) and you still need to budget for repairs and maintenance.
The comparison gets worse if your current car is paid for, since you can purchase a less expensive insurance plan like Liability-Only. If you finance a car, the company you borrow the money from is going to insist on expensive insurance!
Here’s my cheaper to keep ‘er test:
- Take the amount you spent on your car at the mechanic in the past year
- Divide by 12
- Compare to the car payment of the replacement you’re considering
If you’re spending $2,400 a year keeping your old car running, that’s about $200 a month. Replacing it with a $300 car payment doesn’t magically eliminate your $200 of ownership costs—it may simply turn $200/month into $500/month. Do not let your car emergency turn into a car payment emergency!
This isn’t a mathematical rule. It’s a quick way to remind yourself that your old car’s repair costs need to be compared with the total cost of the replacement, not just the repair bill.
Know When It’s Time to Walk Away
You can probably tell I’m a strong believer in maintaining an older vehicle to keep car costs down. However, that doesn’t mean you should just pay any repair bill, no matter how high. I have junked cars before—including one that had a bad engine and one that had a bad frame. But if you decide the car isn’t worth repairing, you can often get more money by selling it yourself on Facebook Marketplace than by sending it straight to the junkyard.
You’ll find a lot of advice on the internet that says if the repairs cost more than the car is worth, it’s time to replace. But it’s a tougher decision to make than this makes it seem. Take this example:
- Repairs needed: $3800
- Car value (in good condition): $3200
It seems like, logically, if you repair and sell this car, you lose $600. If you can get $1500 for it without doing the repairs, you actually come out ahead $2100 ($1500 in your pocket compared to losing $600 on the car). But this is not always the case.
Suppose this big repair gets your car caught up on its issues and your mechanic says you can expect it to last another 5 years. Compare this to financing the Corolla from the previous section, which might immediately need tires, brakes, suspension work, and fluids! The average cost of maintenance and repairs (including wear-and-tear items like tires) is $103 per month, according to AAA. Let’s be generous to the newer car and say your current car is costing you twice as much as the average car, while a reliable gently-used car is going to cost you half as much as the average car, and look at the costs over 5 years:
- Your car: $3800 repair needed plus $206/month for repairs and maintenance for 60 months. Over 5 years: $16,160
- Gently-used car: $3800 in down payment, taxes and fees plus $300/month payment for 48 months plus $52/month in repairs/maintenance for 60 months. Over 5 years: $21,320
Even when replacing your car costs you less in repairs, it can still cost thousands more than keeping your current car!
The decision is whether the cost of keeping the car is more than the cost of replacing it. The key is to make this decision after checking all your options instead of during a mechanic panic.
