Millennials and Gen Z hit harder by repair bills
On average, Americans spent $1,986 on vehicle repairs and maintenance in the last five years, according to a recent Ally survey conducted online by The Harris Poll among 2,012 U.S. adults.
Millennials and Generation Z (ages 18-34 for this survey) paid an average of $2,334 for vehicle maintenance and repairs in the past five years—a significantly higher financial burden than baby boomers and older adults. In comparison, adults 55 and older spent $1,654, on average, during the same timeframe.
Ally’s survey results come on the heels of research from the Federal Reserve that found that nearly 4 in 10 adults would not be able to cover unexpected expenses of $400 without selling something or going into debt.
“Many Americans rely on their cars to get to work and losing access to your vehicle can be a major disruption and huge source of stress—particularly if you can’t cover the repair cost,” said Mark Manzo, President of Insurance at Ally Financial. “The financial strain can be even more daunting for young people who are early in their careers and may be paying down student loan debt as well.”
And when it comes to savings, younger adults are at a disadvantage. Another recent Ally survey found that two-thirds of 18- to 24-year-olds have not established any type of emergency savings fund, compared to approximately half of all other adults.
Ally’s latest survey findings uncovered significant differences in expenses by age and family size, suggesting that not all Americans share in repair costs evenly:
- Younger people paid nearly $700 more in car repairs and maintenance, on average, than Americans aged 55 and older during the last five years. The survey found that, on average, U.S. adults:
- 18-34 spent $2,334
- 35-44 spent $1,978
- 45-54 spent $2,135
- 55 and older spent $1,654
- On average, households with children under 18 paid $347 more in car repairs and maintenance over the past five years than households without children ($2,201 vs. $1,854), suggesting that the expense of raising a family may be compounded by additional repair and maintenance costs.
“Unfortunately, there are too many Americans who are just one unexpected repair bill away from being forced to make tough financial decisions,” added Manzo. “What’s more, many of these drivers aren’t aware of options, like vehicle service contacts, to make their repair costs more predictable.”
The Ally survey also found that only 21% of Americans have purchased a vehicle service contract (VSC) or extended warranty in the last five years. VSCs are auto protection products that cover expenses such as repairs and replacement parts. Ally Premier Protection vehicle service contracts cover over 7,500 vehicle components and offer additional benefits including rental reimbursement, roadside assistance and reimbursement for trip interruption caused by a breakdown. Levels of coverage vary by plan.
Additionally, VSCs can be used to manage repair costs over an extended period of time, making these expenses more predictable and easier to fit into a household budget. When buying a new or used car from an auto dealer, VSCs can be financed as part of the monthly car loan payment. To help consumers make the most of their money, Ally provides information on vehicle service contracts, savings strategies and tools for starting an emergency fund.