How To Prepare For And Handle Auto Repair Emergencies
July 15, 2025
The cost of car ownership extends far beyond the purchase price. Here’s how to prepare your finances so you can handle any auto emergency.

Introduction
After you purchase a vehicle, the expenses aren’t over. So it’s important to be financially ready for ongoing car ownership. Beyond your auto loan payments, annual registration, and car insurance premiums, you’ll also have minor car repairs, fuel or power, and regular maintenance costs, like new tires and oil changes.
You may already include those things in your budget, but what about the big, unexpected, emergency expenses? If your car breaks down or the engine fails, it could cost you hundreds or thousands of dollars that you didn’t plan on spending.
Unless you have an emergency savings fund, you may find yourself struggling to pay for those car repairs. Let’s look at some ways to be financially prepared so you can handle whatever auto emergencies life may bring.
The Benefits of Emergency Funds
The best way to prepare for an auto crisis is to have a dedicated savings account that can function as an emergency fund. Building up that safety net will prevent you from having to take on more debt with auto repair loans.
If you’re wondering how much you should save for an emergency fund, there’s no one perfect sum because everybody has different financial needs. However, common advice is to set aside at least three to six months’ worth of your typical monthly income.
That might sound daunting, but you can build this fund a little at a time. Even $50 or $100 sent to savings every paycheck will add up over time. And any money you have saved can make a difference when paying for repairs.
Pro tip: Make sure your emergency fund is liquid, meaning you can access it when you need it. The ideal scenario would be keeping it in a high-yield savings account rather than stocks, CDs, or other investments.
When To Consider Using Credit
If you have an auto emergency but no money saved, you may need to either be without a vehicle — or use credit to cover the costs. Many car dealer service centers and other mechanics offer financing for this exact purpose, whether it’s their own program or through a third-party partner. These include small loans, co-branded credit cards, and buy now, pay later options. As a bonus, some of these offers may include an interest-free option for shorter terms.
Then you have standard credit cards, which could be a good move if you end up needing to dispute a service down the road. Credit card companies and networks have robust consumer protections in place. So if the mechanic didn’t perform a service you paid for, you have a clear path forward to work out the disagreement and potentially get a refund. The process might not be as easy if you paid some other way.
Of course, another benefit is that if you’re using one of your current credit cards, you won’t have to deal with a new hard inquiry. Oh, and let’s not forget the opportunity to earn credit card rewards.
Once you’ve paid for a service with your credit card, create a plan for paying down your balance quickly. For example, you can reduce your entertainment budget by a certain amount each month and use the money to pay off your balance. The faster you can pay off the balance, the less you’ll likely pay in interest charges. But either way, you can build your positive credit history and boost your credit score by making on-time payments until the full amount is paid off.
Pros and Cons of Extended Car Warranties
Warranties function as a sort of insurance policy for your vehicle. They may cover the repair or maintenance costs for a set period of time and up to a certain number of miles, which can be helpful if you find yourself faced with unforeseen expenses.
A new car comes with a full manufacturer’s warranty, which is included in the original purchase price. And a used car may still have some of that original warranty left, depending on how old it is and how many miles it’s been driven.
But chances are you’ve also been offered an optional extended car warranty. And you’re not alone if you’ve found yourself wondering whether the extra cost is worth the protection offered.
An extended warranty is also known as a vehicle service contract and will usually cost several thousand dollars per year. The exact price depends on the coverage level, warranty provider, current mileage, and car model.
But to figure out whether the purchase price is worth it, you’ll need to weigh the pros and cons.
Pros of an extended warranty:
- Most emergency car trouble issues will pop up long after your original warranty has expired, and the repairs for these problems can be quite expensive if you don’t have coverage.
- Even if your original warranty is still active, extended warranty contracts may protect you against additional surprise expenses not included in your typical repair and maintenance costs.
- All insurance can seem unnecessary until an emergency arises, and an extended warranty may offer you peace of mind.
Cons of an extended warranty:
- Newer cars typically don’t require a lot of repairs, and many issues will be covered by the original warranty.
- Some auto service contracts include exclusions like routine maintenance, wear and tear, aftermarket modifications, or neglect.
- Using your car for business, or side hustles like rideshare, may void a warranty designed for personal vehicles.
The key is to check the contract’s coverage and weigh it against what you think you might use. You can do that by researching the common issues your car model has, and checking whether repairs for that problem are covered under the specific service contract.
In the end, you may be paying more money for the extended warranty than you would on repairs as they come up. Setting up an emergency fund is a great way to have that extra money on hand when you need it.
Bottom Line
Buying a car is exciting. And owning that car can still be exciting years later — as long as you invest some time and money into properly caring for it.
If you’re handy and like to tinker with vehicles, you could be your own mechanic and save some money. It still requires time, but hey … if you’re having fun and getting great results, who cares?
For the rest of us, it’s important to keep some money on hand, or designate some credit to be used only in emergencies. You still have options if you find yourself stranded with a broken-down car and no money on hand, but planning for an emergency in advance makes it much less painful to deal with when it arrives.