Unexpected Car Expenses

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bulldogmed
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Unexpected Car Expenses

Post by bulldogmed »

My check engine light came on over the weekend. I took it yesterday to the shop, and my "catalytic converter" was all "stopped" up. The "O2 sensor" was burnt out which is what triggered the check engine light to come on. All told, the replacement parts and labor came out to almost $1300. I understand that parts wear out eventually and need replacing.

From a budgetary standpoint, does anyone have a "car emergency fund"? Or do you pay for repairs such as this out of a "new car fund"?

How much money should someone plan on saving for car repairs? I know its car dependent. For reference I have a 12 year old Toyota Camry.
JohnFiscal
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Re: Unexpected Car Expenses

Post by JohnFiscal »

I have both a "new car fund" and a "car repair fund". The latter is intended to cover regular costs such as wear items as well as major repairs. I prefer to "amortize" my costs with regular payments over a period of time. It's not as unsettling to me that way.
AllenSmith
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Re: Unexpected Car Expenses

Post by AllenSmith »

Just part of regular "$h1t happens" fund that one should budget for monthly
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avenger
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Re: Unexpected Car Expenses

Post by avenger »

AllenSmith wrote:Just part of regular "$h1t happens" fund that one should budget for monthly
I do this. I keep about $10k in my checking account to buffer any expenses that don't occur on a monthly basis. For example, our recent vacation.
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [VTI, VXUS, VWITX, SV fund]
dolphinsaremammals
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Re: Unexpected Car Expenses

Post by dolphinsaremammals »

Comes out of my emergency fund. I have two old cars (20+ and 40+ years), and expect repairs each year. It is actually pretty consistent for mine.
surfstar
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Re: Unexpected Car Expenses

Post by surfstar »

I don't budget for it, but just pay for it when it happens. I do have a budget line in Mint of $50/month for auto service/maintenance (I DIY almost all of it).

Had a hit and run on my Saturn Vue last month. New fender and a rattle can paint job by yours truly and I'm only out ~$150.
Loandapper
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Re: Unexpected Car Expenses

Post by Loandapper »

dolphinsaremammals wrote:...I have two old cars (20+ and 40+ years), and expect repairs each year...
You have a 40 year old car? Tell us about that.
dolphinsaremammals
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Re: Unexpected Car Expenses

Post by dolphinsaremammals »

zoombrowser wrote:
dolphinsaremammals wrote:...I have two old cars (20+ and 40+ years), and expect repairs each year...
You have a 40 year old car? Tell us about that.
1969 mustang, original owner. Fortunately there is a car repair place nearby that specializes in older cars.
CoAndy
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Re: Unexpected Car Expenses

Post by CoAndy »

I think the older one's vehicle, the more one should keep a separate fund for car repairs. My Honda Accord has 40,000 miles so I am not too keen on keeping a separate account for auto repairs yet. Maybe in a few more years.
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gasdoc
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Re: Unexpected Car Expenses

Post by gasdoc »

My monthly income varies greatly from month to month, so I keep a relatively large liquid checking account, call it an emergency fund if you like. Auto repairs are funded from that account.
roka
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Re: Unexpected Car Expenses

Post by roka »

I think you can drive yourself crazy trying to budget for every expense that may come up. It's gone too far when you have an "upstairs bathroom lightbulb" budget :D I personally keep a few extra thousand dollars in our checking account to deal with the "life happens" expenses.
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avenger
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Re: Unexpected Car Expenses

Post by avenger »

roka wrote:I think you can drive yourself crazy trying to budget for every expense that may come up. It's gone too far when you have an "upstairs bathroom lightbulb" budget :D I personally keep a few extra thousand dollars in our checking account to deal with the "life happens" expenses.
I agree with this. I would hate to worry if I have enough money in my checking account. For example, we put about $6k on our credit card this past month due to an international vacation. It will be paid in full from my account without me even worrying about it. This is about as much "emergency fund" as I have, although I do have about 6 months expenses in a SV fund in my 457 (cash needs inside tax-advantaged account and all that).
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [VTI, VXUS, VWITX, SV fund]
MoneyIsntEverything
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Re: Unexpected Car Expenses

Post by MoneyIsntEverything »

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bulldogmed
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Re: Unexpected Car Expenses

Post by bulldogmed »

MoneyIsntEverything wrote:Regarding the part failure issue: I'd want to be completely sure the catalytic converter is actually bad before replacing it. How sure are you this is not just a dead oxygen sensor? I would be tempted to just replace that (it's about a $50 part for, I assume the upstream sensor, and easy to do yourself, or not that expensive to have a mechanic do), clear the check engine code, and drive the car for a while to see if the light stays off. This is almost easier than finding another mechanic for a second opinion.
Well...it's already done. That was presented as an option, but the mechanic's opinion was that it was likely to occur again. He told me that the O2 sensor was $150. Maybe that would have been the better option at least to begin with, but what's done is done. I don't have a lot of car knowledge, so I guess that puts me at the mercy of my mechanic.
larryinnewyork
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Re: Unexpected Car Expenses

Post by larryinnewyork »

I budget $4,000. per year for unexpected expenses.
So far, never went over.
This covers the vehicle and any home repairs/improvements I do.
When I recently replaced my garage door, ($1,900.) I said to myself, "this was budgeted for".
SQRT
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Re: Unexpected Car Expenses

Post by SQRT »

I think there are two aspects of "budgeting" for lumpy expenses such as car repairs. Firstly you need to keep enough liquid cash around to cover the expense. So you keep a larger savings or checking account than you might otherwise to cover these types of things.

Probably the more interesting question though is how do you treat these things in your budget, both actual (past and present) and forecasted (future). I add about $500 per month to my budget to cover unexpected auto items. If I plan on buying a new car in the next few years, I put that amount into the auto expense in that period. Some people try to spread the cost of a new car over a period of years, but I find this too complicated. I generally have a current year budget and 2 more future years after that. The farther out budgets are less "solid" than the current year one and I adjust them as my thinking changes. At the beginning of the year we crystallize the next year's budget and don't change it thereafter. Forecasted actually change every month and is compared to budget. We are running about 2% over budget at this point due to some surprise expenses.
lakpr
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Re: Unexpected Car Expenses

Post by lakpr »

bulldogmed wrote:My check engine light came on over the weekend. I took it yesterday to the shop, and my "catalytic converter" was all "stopped" up. The "O2 sensor" was burnt out which is what triggered the check engine light to come on. All told, the replacement parts and labor came out to almost $1300. I understand that parts wear out eventually and need replacing.

From a budgetary standpoint, does anyone have a "car emergency fund"? Or do you pay for repairs such as this out of a "new car fund"?

How much money should someone plan on saving for car repairs? I know its car dependent. For reference I have a 12 year old Toyota Camry.
I have the EXACT EXACT issue -- check engine light coming on, and when taken to a repair shop I was told that the "catalytic converter" needs replacing. And the quote is spot on too .. $1300. Mine was 1999 Toyota Corolla, I am the original owner.

I junked the car (well, donated it to a charity), and bought a brand new Toyota Camry instead of bothering with the repairs. I expected that this day would come eventually, and I think 16 years I got on that car was value well received! I literally drove the car till death.

I expect the new Toyota Camry will give me another 15 to 20 years at least.
Bill M
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Re: Unexpected Car Expenses

Post by Bill M »

We have two cars; the younger one (13 years) has over 200K miles, and the older one (15 years) has only 135K. We budget $2400/yr for car repairs. Your repair bill sounds typical.

If you had the repair done at Midas, its the last Cat your car will need. They guarantee them.
snowman
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Re: Unexpected Car Expenses

Post by snowman »

bulldogmed wrote:
MoneyIsntEverything wrote:Regarding the part failure issue: I'd want to be completely sure the catalytic converter is actually bad before replacing it. How sure are you this is not just a dead oxygen sensor? I would be tempted to just replace that (it's about a $50 part for, I assume the upstream sensor, and easy to do yourself, or not that expensive to have a mechanic do), clear the check engine code, and drive the car for a while to see if the light stays off. This is almost easier than finding another mechanic for a second opinion.
Well...it's already done. That was presented as an option, but the mechanic's opinion was that it was likely to occur again. He told me that the O2 sensor was $150. Maybe that would have been the better option at least to begin with, but what's done is done. I don't have a lot of car knowledge, so I guess that puts me at the mercy of my mechanic.
That's too bad, because you could have saved over $1K in unexpected car repairs. I am not saying you would for sure, but you could have. Even if the cat converter code comes up, many times replacing just the O2 sensor will fix the problem. Upstream one is cheap and easy to change yourself. Your mechanic is right in that replacing O2 sensors and CC all at the same time will fix 99% of problems and the customer will not have to come back. However, it's the most expensive, and many times unnecessary, way of dealing with the emissions problems.
Jack FFR1846
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Re: Unexpected Car Expenses

Post by Jack FFR1846 »

lakpr wrote:
bulldogmed wrote:My check engine light came on over the weekend. I took it yesterday to the shop, and my "catalytic converter" was all "stopped" up. The "O2 sensor" was burnt out which is what triggered the check engine light to come on. All told, the replacement parts and labor came out to almost $1300. I understand that parts wear out eventually and need replacing.

From a budgetary standpoint, does anyone have a "car emergency fund"? Or do you pay for repairs such as this out of a "new car fund"?

How much money should someone plan on saving for car repairs? I know its car dependent. For reference I have a 12 year old Toyota Camry.
I have the EXACT EXACT issue -- check engine light coming on, and when taken to a repair shop I was told that the "catalytic converter" needs replacing. And the quote is spot on too .. $1300. Mine was 1999 Toyota Corolla, I am the original owner.

I junked the car (well, donated it to a charity), and bought a brand new Toyota Camry instead of bothering with the repairs. I expected that this day would come eventually, and I think 16 years I got on that car was value well received! I literally drove the car till death.

I expect the new Toyota Camry will give me another 15 to 20 years at least.

You juked it? For future reference, if the cel is on and the car is still running ok, keep driving it till your inspection is due.
Bogle: Smart Beta is stupid
jlawrence01
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Re: Unexpected Car Expenses

Post by jlawrence01 »

bulldogmed wrote:My check engine light came on over the weekend. I took it yesterday to the shop, and my "catalytic converter" was all "stopped" up. The "O2 sensor" was burnt out which is what triggered the check engine light to come on. All told, the replacement parts and labor came out to almost $1300. I understand that parts wear out eventually and need replacing.

From a budgetary standpoint, does anyone have a "car emergency fund"? Or do you pay for repairs such as this out of a "new car fund"?

How much money should someone plan on saving for car repairs? I know its car dependent. For reference I have a 12 year old Toyota Camry.

Personally, I budget $1,500 on car repairs a year once a car reaches 100k miles or 10 years old.

I don't "do" emergency funds or a new car fund. We own one economy car for the two of us and could write a check for a new one, if needed. I found that once I had $10-20k in savings, there were infinitely fewer emergencies.
lakpr
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Re: Unexpected Car Expenses

Post by lakpr »

Jack FFR1846 wrote:
lakpr wrote:
I junked the car (well, donated it to a charity), and bought a brand new Toyota Camry instead of bothering with the repairs. I expected that this day would come eventually, and I think 16 years I got on that car was value well received! I literally drove the car till death.

I expect the new Toyota Camry will give me another 15 to 20 years at least.

You junked it? For future reference, if the cel is on and the car is still running ok, keep driving it till your inspection is due.
I gave the car to charity during the last week of March 2015, and the inspection was due April 2015. I didn't want to spend $1300 on a car that, according to KBB, is worth only $2000 at best. Besides, I thought it's time for me to treat myself and 16 years is enough wait time to justify buying a new car.

Lastly, another thread on this forum convinced me to go new instead of buying used: viewtopic.php?f=2&t=162421
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