A full 25% of Americans couldn’t pay for a $2,000 repair bill should their vehicle break down, a new report by AAA confirms, hinting at the continued struggle most citizens are facing in the wake of the great recession.
When polled, a total of 38% of drivers said they could cover the cost of a $2,000 bill using money from savings, while 20% said they’d have to use a credit card. A total of 11% of respondents said they’d have to borrow money, or use retirement funds or a home equity loan.
One eighth of drivers said they couldn’t cover a $1,000 repair bill, with 46% answering that hey could. A total of 22 percent answered that they’d need to use a credit card and 14% would need to borrow the funds.
According to AAA, a $1,000 repair bill could be anything as small as a new set of tires of a major brake job, while major repairs to components like the transmission could cost from $2,000 to $4,000.
One quarter of drivers said they neglected repairs and maintenance in the past 12 months as a direct result of the economy. Unfortunately, ignoring smaller jobs can often lead to larger ones.
“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.
The survey also revealed that a total of one quarter of American drivers are continuing to drive their old model because they don’t feel they can handle the cost of a new one.
[Source: Automotive News]