Vehicle maintenance costs are an expense no one wants to deal with.
At first glance, the monthly expense of an extended auto warranty or one of our top-rated Ambassador Plans may feel like a burden.
However, we dug through the research, averages, and data on vehicle maintenance costs and repairs to reveal the answer to the question:
Will An Extended Auto Warranty Save Me Money?
The answer is…maybe.
To make the decision on whether an extended warranty or one of our extended warranty vehicle protection plans is right for you, it’s important to understand not only average vehicle maintenance costs but also how much potential savings an extended warranty or service contract could provide.
What Are Some Of The Most Common Costs That An Extended Warranty Can Help Cover?
According to a study by YourMechanic.com, the average annual cost of owning and maintaining a sedan is $1,186.
This number goes up for larger vehicles like an SUV, which has an average yearly cost of $1,254 for ownership and maintenance.
These averages are based on a number of factors, including the make and model of your vehicle, driving habits, location, frequency of trips, and more.
For example, if you drive a lot, you can expect to pay more for gas and oil changes.
You might also consider the cost of living in your area when budgeting for vehicle ownership–in general, living in a rural area will be less expensive than living in an urban area.
Some of the most common vehicle maintenance costs include:
Oil changes: $20-$100
Tire rotation: $20-$40Brakes: $100-$500Battery: $70-$200Windshield wipers: $10-$30
While these are just averages, and your specific vehicle might have different needs, it gives you a good starting point for estimating your own maintenance costs.
Now that we’ve looked at average vehicle maintenance costs, let’s compare those to the potential savings an extended warranty or one of our protection plans could provide.
Now, take a look at the facts when it comes to vehicle maintenance costs:
Annual Vehicle Maintenance Costs
Maintenance (**Excluding depreciation): Vehicle Maintenance was up .99 percent to 5.11 cents per mile/$766.50 per year (+$7.50) from year-to-year.
Annual maintenance, including labor time and repair part costs associated with factory-recommended maintenance, was factored into the 2015 survey along with the average costs of an extended warranty.
Vehicle maintenance costs varied widely by vehicle type but, on average, were up slightly from 5.06 cents to 5.11 cents per mile.
A recent survey of AAA-Approved Auto Repair shops found that the majority of drivers are behind schedule in routine maintenance, including oil changes, tire maintenance, and battery inspection/testing.
Consumer Reports estimates maintenance and repair (excluding tires, accidents, warranty-excluded repairs) costs at $2,500 for a luxury SUV over five years including three years under a warranty.
That means that even when covered for the initial warranty period, costs remained around an average of $500/year and are guaranteed to spike immediately after three of them.
When asked what they would do with $500 in extra cash, people indicated they would spend it on vehicle repairs and maintenance.
Needless to say, the majority of people are not happy about spending money on vehicle repairs and maintenance.
In fact, 63 percent said they would like to never have to spend money on their car again.
Factor in Unanticipated Vehicle Repairs
$2,604. This is the national average per repair, taking every state’s average into account.
A National Average per repair, with states like Rhode Island, Texas, and New York placing above average, and states like Hawaii, Oregon, and South Carolina falling below average.
This data was generated by Audatex, an independent company that supplies statistics to insurance companies, repair shops, and the government.
This data was used by the Property Casualty Insurers Association of America to prepare their annual report on automotive repairs. While the average annual maintenance cost is $766.50, this figure can vary widely depending on the make and model of your vehicle.
For example, Consumer Reports estimates that routine maintenance and repairs for a luxury SUV (excluding tires, accidents, and warranty-excluded repairs) over a five-year period will cost $2,500, or an average of $500 per year.
And once your vehicle is out of warranty, repair costs are likely to increase.
How Much Are Labor Costs Per Repair?
In almost all cases, labor accounts for at least 40% of total repair costs. (See our blog about knowing your stuff around a mechanic).
Factor in labor costs, parts costs and the possibility of minor collision or replacement repairs and you have a conservative estimate of $2,000/year per vehicle.
With a potential monthly payment of $30 for a Protect My Car Ambassador Plan, your savings could end up being astronomical ($406 on maintenance alone).
The best way to avoid expensive repairs is to keep up with routine maintenance and be proactive about car care.
However, an extended auto warranty can give you the peace of mind that comes with knowing your vehicle is covered in case something does go wrong.
Call us now for more information and we’ll walk you through the steps to financial freedom from your vehicle costs.