Media post: How Rising Repair Costs are Shaping Auto Buying in 2025

The Consumer Price Index for vehicle maintenance expenses is rising faster than overall inflation, highlighting an increasingly complex challenge for drivers. Costly repairs can cause significant stress, often requiring substantial financial resources that many are unprepared for. Having a practical guide on covering unexpected car expenses can help drivers manage repairs without severely impacting their budget.

However, not everyone can cope with these challenges, and some even postpone buying their first car or upgrading to a newer model. But drivers should take a more thoughtful approach to repair issues, determine which vehicles are worth the investment, and learn to manage the rising costs of vehicle maintenance. Read on to find out how.

Why Auto Repair Costs Keep Increasing

Mechanics charge higher rates because cars have complex electronics that require appropriate diagnostic tools. A routine windshield replacement could easily exceed $1,000 for a model with driver-assist features.

Shortages of certain parts also make repairs more expensive. Supply chain disruptions have led to higher prices for steel, rubber, and semiconductor chips and affected the production of even basic car components.

Original equipment manufacturer parts remain popular because many car owners want high-quality replacements. However, they often cost more, and drivers can search for cheaper options, which might cause car issues later.

How Higher Repair Costs Affect Car Owner Decisions

Many people confront a tough choice. Two of the most common situations are:

When Your Car Broke Down, and You Have No Money

A broken engine or bad transmission can leave your car stuck at home. You’ll need quick finances to help with car repairs if you have no savings. Owners can try short-term financial options, such as a credit card, apply for small car repair loans, or ask the mechanic if a payment plan is possible.

When Repairs Cost More Than Your Car’s Value

An old Sedan with over 150,000 miles might be worth $3,000 in a private sale, but it could need $3,500 of engine work. Repairing it makes little sense if the car’s resale value is that low. Owners decide to sell or trade in the vehicle. More buyers shift to newer or certified pre-owned cars because warranties cover big repairs.

Real Costs of Owning an Older Car

Age matters. Even an older car that’s cheaper to buy can become expensive to maintain. The average annual vehicle repair cost is around $1,300, including basic wear-and-tear items such as brakes, tires, and belts. It does not include major failures.

Fuel economy is also an issue. Sometimes, drivers don’t understand why their car suddenly gets better gas mileage. It all comes down to the car’s age: older models consume more gas than newer models and require higher fuel costs. When you add insurance, registration fees, and urgent maintenance, owning an older car can cost more per year than owning a newer one with fewer problems.

How Repair Costs Accumulate

Small issues can become huge problems if you ignore them. Frequent breakdowns disrupt daily life, and you might miss work or important appointments. Owners fix problems immediately, even if it means taking on debt. They can also hope minor issues won’t worsen, but many end up paying more because they waited.

Examples of Repair Costs vs. Vehicle’s Worth

A clear instance is a 12-year-old SUV with 150,000 miles, valued at about $8,000. The mechanic might quote above $3,500 for parts and labor. Owners do the math and decide to replace the SUV. Others fix their car because they can’t afford another vehicle right now. A few repeated failures in a single year can cause a tight budget.

New Tendencies in Car Buying Behavior

Rising repair costs influence how people buy cars. A few approaches include:

Reliability Over Price

A reliable car that costs more upfront can save you thousands later. A U.S. vehicle dependability study shows that brands with exceptional reliability have higher resale values. Maintenance costs vary, as some cars have known problems that lead to repair bills. Read online forums and check reliability ratings to avoid mechanical problems.

Leasing Cars

Leasing attracts drivers who prefer having newer cars under warranty. Monthly payments, nearly $750 in 2024, are lower than buying a new vehicle, but you don’t build equity in the car. A lease lasts 2-3 years when the car is least likely to develop major mechanical troubles. If a repair appears, it’s covered by the warranty. Leases have mileage limits. Going over those miles means paying fees at the end of the term.

Trading In Vehicles

It’s one way to skip the big maintenance bills when a car passes 100,000 miles. Timing belts and other elements often need replacing, so trading the vehicle earlier can spare you those costs. Dealerships inspect the vehicle’s condition before deciding on the trade-in value. It may be easier to trade in a car that is still running smoothly because you can negotiate a better deal.

How to Pay for Car Repairs with No Money Available?

Sudden breakdowns create inconveniences. A few options drivers can consider when they lack cash for emergency repairs are:

Personal Loans for Car Repairs

These long-term loans are helpful if you have a good credit score. The bank deposits the funds into your account, and you use that money to pay the mechanic. You then repay the loan in fixed installments each month. Your credit history shows APRs range from 6% to 36%. This option is more structured than a high-limit credit card.

Getting Help From Family

If you promise to repay them, family or friends might agree to cover a repair. This informal loan is easier to arrange than a bank loan, but mixing finances with personal relationships may cause tension. Set a clear deadline for repayment and create a written agreement to avoid misunderstandings.

Mechanic Payment Plans

Shops might partner with third-party companies to provide payment plans. The shop gets paid immediately, and you make monthly payments to the financing partner. Approval might depend on your credit score. Some plans come with zero interest for a short period, but the rate can jump if you miss a payment.

Special Programs

There are local and national programs that provide free auto repair assistance. However, they have limited funding and long waiting lists and are geared toward people with disabilities. They may also be available to low-income families who need a working vehicle to get to work or doctor appointments.

Future Outlook

Repair costs will likely remain high as the inflation rate for auto maintenance grows. As cars become more advanced, mechanics need specialized training. Parts with computer chips or built-in sensors add complexity to every repair.  You can keep your old vehicle or buy a new one, but having a budget for unexpected expenses for car repairs and maintenance prevents unpleasant situations.