Save now for car maintenance & repairs

Photo by jeffwilcox

Tony and I share a single car. It’s only about two years old, and we bought it brand new. Because we have just one, and we plan to drive it for at least 10 years if we can, it’s particularly important that we take good care of it.

This month is going to be a big one for car expenses. Not only do we owe $90 for our yearly county auto tax, but we’re also taking a 2,000-mile road trip to see family for the holidays. To prepare for the trip, we’re getting the oil changed a little early and having our fluids and tires checked to make sure everything is in top shape.

The grand total will be about $140. A year ago I would have been stressed to have such a large expense added on to our Christmas shopping spending and travel expenses. Not this month, though.

Last summer, we began saving $25 a month in a special car savings account. We have about $135 in the account now, so we only have to spend $5 out of our regular budget to pay our taxes and keep our car running smoothly for the trip.

Because it’s a relatively new car and it’s still under warranty, $25 a month is enough for us to pay for routine maintenance. However, as the car gets older, we’ll need to save more. Once the warranty is up, we want to have a good chunk of change saved to cover more expensive maintenance as well as repairs.

Yes, a car problem would certainly fall under the realm of acceptable uses for our emergency fund. But if we can anticipate regular maintenance and scheduled repairs (such as new tires, brakes, and other incidentals), we won’t have to dip into our emergency fund.

I don’t even miss $25 a month since it’s deducted at the beginning of each month, but having that money there when we needed it has made our holiday season a lot less stressful.

We keep a similar account for “dog maintenance.” (Ha.) This pays for yearly vet appointments, shots, and flea and heartworm prevention medicines. We only pay for this stuff once a year, but deducting money from our budget each month is so much easier than coming up with the money in one lump sum every year.

Other uses for these types of advance planning savings accounts include haircuts, birthday/Christmas gifts, out of pocket medical expenses (if your insurance provider doesn’t offer a tax-free HSA), and any other yearly expenses.

If you’d like to start a savings account for your own regular yearly expenses, here’s my advice:

  • Use ING Direct (email me for a referral link if you haven’t opened an account yet, and you’ll get a $25 bonus if your first deposit is $250 or more.) ING makes it extremely simple to maintain separate accounts, and you’ll earn a decent interest rate (right now 2.75%).
  • Figure out how much you need to save each month to cover the total amount you’ll need for the year. For example, we get our oil changed about 2-3 times a year. If we were saving for oil changes only, we’d need about $90 a year, or $7.50 a month. Because we also save for taxes and we’re trying to build a surplus to carry over to next year, we save $25 a month.
  • If you’re worried about working it into your budget, start small. Gradually increase the amount by small increments until you’re saving enough to cover your expenses.
  • Don’t touch the money! It helps me to consider that money already spent, as if oil changes are a monthly expense instead of only every few months. That $25 a month has already been “spent” on car expenses, so it’s off limits. Then when it’s time to spend it, I just move it over from savings to my checking account.

4 thoughts on “Save now for car maintenance & repairs

  1. Tiffanie

    we have a 2006 car and although it is newer and doesn’t need so much in the way of auto repairs or maintenance, we’ve gotten in the habit of saving $100 month in our auto maintenance fund. we factor in things such as new tires (over $500 on our car) and synthetic oil changes (less frequent, but more expensive), and license renewal. i’m glad we saved so much each month because not too long ago we needed all 4 tires replaced plus regular maintenance before winter, which we got at a discount through a friend who is a mechanic and owns his own business. but it was still pricey. we drained the account and had to start building it right back up! luckily, we won’t need tires again for a while, but i’ve still gotten used to the $100/month :)

    Tiffanie’s last blog post..the one dollar give has begun!

  2. Margot

    A good way to save money is to do oil changes much less frequently than recommended. You can google the issue — I think Consumer Reports wrote about the topic as have other reputable entities. It turns out that the “every 3000 miles or 3 months” thing (not sure if I have that right) is entirely made up by the auto repair industry and our cars and safely go much longer without oil changes. Many car manuals actually say that you can do it less frequently. I read my old car manual, and it said either 5000 or 7000 miles.

  3. Pingback: Preparing for a frugal holiday road trip — Living Well on Less

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