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25% of Americans Couldn’t Afford a US$2,000 Car Repair Bill

Monday, August 15, 2011

The former American Automobile Association, now known by its acronym AAA, is probably the most recognisable organisation of its type in the world.
And with some 52 million members, it’s also one of the world’s largest if not the largest automobile associations in the world.
Suffice to say, when the AAA speaks, the world listens. In a recent telephone survey of 1,009 adults in the continental United States, the AAA found that 12.5% couldn’t cover a US$1,000 (€701) car repair bill and 25% couldn’t cover US$2,000 (€1,402) car repair bill.
Additionally, 50% of those surveyed are holding on to an older vehicle until the economic climate improves and 25% have neglected repairs or basic maintenance on those vehicles over the last twelve months. Doing so, the AAA says, can greatly increase the risk of major and costly repairs.
Marshall L. Doney, AAA’s VP for Automotive and Financial Services explains:
“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. 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.
Of those who can afford the US$2,000 repair bill, 38% said they would pay with their savings account, 20% said they would pay by credit card and 11% would have to borrow money from friends, family, their retirement fund or home equity to pay it.
Things are a little less grim for those can afford the US$1,000 bill. 46% said they would pay with their savings account, 22% would pay with their credit cards and 14% would need to borrow money.
Such bills are not unheard of with older vehicles, especially those that have been mistreated or improperly maintained. A transmission repair can cost anywhere from US$2,000 (€1,402) to US$4,000 (€2,804) and engine repairs can exceed US$5,000 (€3,506).
Similarly, major brake repairs or a new set of tires can pull US$300 (€210) to US$1,000 (€701) depending on the make and model.
All in all, the AAA survey should give owners of older vehicles something to think about in the coming months or years of ownership.


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