One in four American drivers could not pay for a car repair of $2,000 if faced with one today, according to the results of a survey released by AAA. The survey also found 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, which AAA Automotive experts say can greatly increase the likelihood of their car needing a costly, major repair.
"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 Vice President, 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," continued Doney.
According to the survey, 38% of American drivers could pay for a $2,000 repair bill with funds in a savings account, while 20% 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% saying they could use savings and 22% using a credit card. Fourteen percent would look to borrow from their friends, family, retirement or home equity.[Source: Survey conducted by AAA Automotive. 3 Aug. 2011. Web. 4 Aug. 2011.]