Servicing your car regularly can go a long way towards keeping it in top shape, putting off the need for costly repairs. Yet breakdowns can happen to even the most properly maintained cars, and can be quite costly at times. To avoid blowing the entirety of your savings on engine repair, it’s best to budget in advance for the cost of car maintenance and repair. One of the best ways to do this is to create a budget based on your past spending habits. By examining what you have spent in the past on maintenance, you can use this as a guidepost for future costs. You’ll also want to think about the other costs associated with owning a car, from fuel to insurance. The following are a few budgeting guidelines to help you get started.
Examine your Past Maintenance Records
If you already have a car, you can use your past service and repair records as a guide. Find all of your car maintenance records over the past year. Even if you don’t have the receipts, you could comb through bank and credit card statements to see how much you’ve paid. What constitutes maintenance? Generally, this includes the cost of oil changes, routine servicing, repairs, and work on your tires. However, it shouldn’t include your car repayments or insurance costs, which fall under a different category. Tally these numbers together and divide by 12 to get the average amount you spent per month over the past year on maintenance. This should be used as a minimum amount for future budgeting.
Take Current Condition into Account
It’s important to take your car’s age and current condition into account as you work out your budget. If your car has deteriorated over the past year, chances are that you will have to pay more in the following year on maintenance. For older cars, increase this monthly amount. However, if your car is in good shape following some serious repairs or you’ve just purchased an almost-new BMW at Carsales, you may actually need to pay less over the next year. As a general rule, $100 per month is a good baseline for most vehicles.
Tally the Total Cost of Ownership
While you’re crunching numbers to create a budget for maintenance, you might want to look at the full cost of running a car. There are a number of online calculators that can help you figure out running costs. The full cost of a car includes its purchase price, fuel, taxes, insurance, registration, administrative fees, and repair and maintenance. You could either create separate budgets for each of these, or put money aside to cover all of the above.
Put Money Aside each Month
If you’ve planned to budget simply for maintenance, take this money out of your monthly pay and put it into a fund designed for this purpose. Don’t touch your maintenance fund until you need it.
By taking the time to calculate the average amount of money you spend on repairs, you can prepare for the future and avoid being blindsided by sudden maintenance costs. It’s difficult to predict when your car will need servicing, which is why a small nest egg can help keep you on budget.
Save More Money in 2018
Subscribe and join the worldwide 52-week money challenge! Get the tools you need right to your inbox.