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Budgeting for Car Repair Costs

New cars, old cars, in-between cars—all of them have one thing in common. Well, technically they have lots of things in common, but right now we’re talking about how every car needs car repairs.

Of course, not all car repairs are created monetarily equal. So, how do you budget for car repair costs? We’re glad you asked. This article is fueled with all the info you need to be money-ready for whatever vehicle fix-ups come your way.

The Top 10 Most Common Car Repairs

The Top 10 Most Common Car Repairs

First, let’s play the popularity game, as in the most popular car repairs. You’ll see they can range in price from around just $25 all the way to nearly $1,400. Coming in at the top, we’ve got a tie between replacing ignition coils and spark plugs and replacing oxygen sensors.1 (Try saying that five times fast.)

And it appears the most common curse words a mechanic can say are “your catalytic converter is shot,” since that ranks as the most expensive on our list.


Dave's easiest money-saving tip: See if you're over paying for car insurance.

Remember: Repairing your car is just part of car ownership. It comes with the territory. So, if you know that, and you’re armed with the breakdown of numbers below, you can prepare your budget accordingly.

Top 10 Most Common Car Repairs

How to Budget for Car Repairs

How to Budget for Car Repair Costs

Now it’s time to pop the hood and sort through the actual mechanics of budgeting for all these possible car-owning costs.

Save up an emergency fund.

Step one: You need an emergency fund. If you’ve got debt, start with $1,000. We call this Baby Step 1. Once you’re debt-free (and paying off all that debt is Baby Step 2), save up a fully funded emergency fund of three to six months of expenses (Baby Step 3).

When the unexpected happens—to your vehicle or anything else—an emergency fund acts like an airbag. Only instead of keeping your face from hitting the dashboard, it keeps your life from getting financially smashed in.

The way you build up an emergency fund, of any size, is by putting it in your budget. Be intentional by creating an emergency fund budget line.

Create a car repair sinking fund in your budget.

Simply put, a sinking fund is a special compartment in your budget that saves up money for big purchases. Create a line in your budget for car repairs and build up a sinking fund that’s ready for repairs or replacements.

Some of you may be thinking, Ugh. Stuffing money into a sinking fund each month for upcoming car repairs sounds about as enjoyable as waiting in line at the DMV. But look at it this way: If you had a car loan, you’d be putting $554 a month toward that debt.2 Instead, you’re the smart one who paid cash for your car and is now ahead of the game by consistently putting less than that giant car payment into a sinking fund for whatever comes your way. Hey, even “reliable” cars need repairs and maintenance. A sinking fund makes you budget-ready, no matter what you drive!

Should you use the emergency fund or sinking fund?

You know you’ll need to pay for repairs and maintenance. It’s a thing. And when you know something’s coming, that’s not an emergency fund situation. That’s a sinking fund situation.

Of course, sometimes there are real emergencies . . . When that happens, do a little tweaking to that month’s budget as your first line of defense. What budget lines can you trim to free up cash? What can you give up that month? If you still don’t have enough cash to cover the emergency after you trim up and cut back, then you take money out of your emergency fund.

Tips for Reducing Car Repair Costs

Tips for Reducing Car Repair Costs

So, you’re cash-ready for those car repairs, but you still don’t want to pay full price or make poor maintenance decisions that will end up costing you even more in the long run. Good. Good for you. Let us help you out with some tips for reducing car repair costs.


Don’t get yourself in over your head or anything, but plenty of minor car repairs can be done from home. The internet holds a glorious wealth of “how to” step-by-step guides (both articles and videos depending on your learning style) to help you with some of the basics. If you can DIY the repair, you’ll save all those labor costs.

Change your oil regularly.

Fresh oil keeps your engine purring like a contented kitten. Otherwise, you’ll be running on sludge and asking for some long-term damage. For a conventional oil and filter change, you'll pay between $35 and $75.3  Budget to get an oil change done around every 5,000 to 6,000 miles.

Check your tire pressure and tread.

Here’s a “wheely” good tip (sorry, couldn’t resist) on how to extend the life of your tires—and save money on tire replacements: Rotate those bad boys every 6,000 to 8,000 miles. And while we’re on it, make sure you check the air pressure in your tires every couple of months.

Keep that air filter clean.

This keeps air-crap (technically called pollutants) from coming in through the vents. Keep those babies clean by changing the filter every 12 months or 12,000 miles. Not only will you breathe easier, it’ll also keep your air conditioning system from experiencing major problems.

Get regular car tune-ups.

Okay, okay. We know what you’re thinking here. This seems expensive and unnecessary. But we’re talking about the long-term health of your car. (Think of it like getting an annual physical to keep your body moving well.) Getting a full car service with a reputable mechanic means getting multiple systems checked and adjusted to keep your car running smoothly for the long and winding road. 

Follow your manual’s directions.

When in doubt, check it out. “It” referring to your car manual. How often should you get tune-ups? Check the manual. Wondering how to troubleshoot common problems? Check the manual. Want to know how to check your fluids? You get the picture. Follow the care directions to extend the life of your vehicle.

Research ways to save.

When you need a repair—get a second opinion. Ask for a cash discount. Figure out what can wait, do the time-sensitive repairs right away, and then save up for the rest. These are three ways you can put the research pedal to the metal to save on car repairs.

If you think about financing a car, pump the brakes. Don't do it.

Here’s a final word of wisdom. If you’re thinking of financing your car—pump the breaks, friends. That’s a hard no. Look at the stats below. It isn’t worth it. Buy a car with cash, even if it’s a bit of a beater. Then, save up for a nicer one. Instead of throwing that $554 to a value-dropping leased car, save that amount each month into a new(er) car sinking fund!

Why Car Loans Suck

Seriously. Don’t make us pull this car over. Don’t. Get. A. Car. Loan.

At the end of the road, you can be budget-ready to take care of your car. But. You will need a budget. With the EveryDollar budgeting tool, you can set up your first budget faster than you can change a flat (unless you’re in the pit crew for the Indy 500).      

Budget for the bumps in the road and all the twists and turns of the journey—both expected and unexpected. Then you can easily take care of your car with cash in hand.

You’ve got this. Vroom vroom.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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