How to Fund Auto Maintenance – Our New Sinking Fund

fund auto maintenance

If You Own Vehicles You Need to be Able to Fund Auto Maintenance

We own vehicles. Three in fact. We each have our daily driver plus a spare vehicle we can haul a trailer with and use if a daily driver is down for repair. They are not new cars, in fact, the newest is a 2013 model. They are however good cars, and since we’d like to keep it that way we decided it was high time we set up a fund for auto maintenance.

If you are like us and live in a more rural area, commute to work, or just don’t like public transportation you probably own an automobile. If you live in a more densely populated area with mass public transportation you can probably get by quite comfortably without one. That’s awesome too.

Kudos to you if you paid cash or are on your debt-free journey to pay the thing off early! We financed every vehicle we’ve bought in our adult life and paid them off two to three years early. We hope one day to put ourselves in the position to pay in cash for reliable vehicles.

Cost of Driving Older Vehicles

AAA estimates the average newer vehicle will cost an owner $1,186 a year to repair and maintain. That’s almost $100 a month. Expect to pay a bit more than that if your vehicle is older; vehicles can need additional services once they reach a certain mileage to keep them in good runing order.

At just over 100,000 miles on the odometer, my vehicle is due for a transmission fluid change. This expense spurred us to set up a separate account to fund auto maintenance. We budget a certain amount every month for potential auto needs, but we do not separate the money out. We typically reappropriated unused funds to another budget category at the end of the month. Not anymore! We have a sinking fund in place now.

If you’re not sure what a sinking fund is or what other categories it may be good to have one for check out my previous article, A Quick Intro to Sinking Funds or just search the Sinking Funds category for all related posts on my site. They can be a very useful budgeting tool. They can help you avoid putting expenses on the credit card or draining your emergency fund (please tell me you have one of those) for routine expenses like auto maintenance.

Take good care of your vehicles and the cost to maintain them should be pretty predictable. It just makes sense

When You don’t Budget for the Unexpected…

Remember our old friend Murphy? He came to visit and decide to extend his initial stay last month. We were already paying off medical bills and were now faced with more. And we were just starting to get serious about that all-important emergency fund when Murphy came knocking.

We didn’t have any particular amount set aside for car-related expenses rather than budgeting for oil changes when needed. Occasionally my husband will inform me of an upcoming routine expense outside of oil changes and we will work those into the budget as well.

But we didn’t have money set aside for unexpected or future auto expenses; when my husband took our daughter swimming and got hit by a deer we were very lucky that not only was everybody okay (except the deer) his car was left driveable.

The headlight is damaged but still works. The small tear in the bumper is not that noticeable… yet. We didn’t have a solid plan in place for car care and therefore both items are just going to have to wait until we have the funds available.

Now that we have an account in place I will be making monthly deposits to the account whether we need work done that month or not until we get it up to a healthy balance. This may be a while as we need the abovementioned transmission servicing, headlight, and will eventually need to address the bumper.

I will be the first to admit this adulting thing is hard! The best way to do it is to learn as you go. So lesson learned, auto maintenance fund started, and we will adjust the budget going forward so we are contributing to this new sinking fund and do not have to resort to credit card use or neglecting our vehicles.

Do You Need an Auto Maintenance Fund?

Do you use a sinking fund to fund auto maintenance expenses? How do you know if you need one? Luckily there aren’t too many questions to ask yourself to determine the answer:

  1. Do you own a vehicle? If the answer is no, then you probably don’t need one. If you want to buy a car you would be wise to start a sinking fund to save up for the purchase. Maybe
  2. Is it under warranty? If so do you fully understand what said warranty does and does not cover? Can you afford the repairs not covered? If the answer to this question is no then an auto maintenance fund may be a good idea.

Get Started

Let me know if you have any questions about auto maintenance sinking funds. Getting started is simple; chose to put ours in the same bank we have our Christmas savings account. We chose a free checking account and didn’t order checks through the bank. The minimum to open the account was just $100. The peace of mind we gained knowing we have a better plan for our money going forward is priceless!

For added accountability, we chose not to link the debit card to our Christmas account or allow transfers between the two accounts. These are two separate sinking funds and they need to stay that way! It took less than an hour to get set up and we walked out with our debit cards in hand.

That’s it for now; I think I’m going to pull up EveryDollar and update the budget! We have a plan now, so time to work it!

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