In Canada, the average cost for routine vehicle maintenance ranges from $500 to $700 a year. But the total cost of a sudden car breakdown can run into the thousands. 

Learn how to budget for repair and breakdown costs and avoid getting stuck with a huge bill you can’t afford to repay. 

How much should you budget for used car repairs and maintenance? 

According to Ridetime, a good rule of thumb is to save $1,200-$2,000 for repairs and maintenance every year. But the answer to this question will vary based on your car’s make, age, and mileage. 

Ultimately, you’ll need to stick to a budget that works for your particular situation. Used vehicles are statistically more likely to break down than their brand-new counterparts. And the cost for repairs varies greatly. (For example, a new car battery might cost you ~$100 but an engine replacement could result in a bill that’s $9000 and up.) 

To calculate how much to budget for car repairs and maintenance each year, familiarize yourself with average car repair costs in Canada and use the Canadian Automobile Association’s driving costs calculator to get an idea of your vehicle’s average annual repair costs. 

Ways to budget for car repairs 

Here are two methods you can use to budget for car repair costs. 

Emergency fund  

Provided you’re a disciplined saver, emergency funds are a great way to save for car repair costs and maintenance. Simply squirrel away the money you’ll need to cover vehicle repairs and don’t touch the fund until it’s time to pay up. 

For example, if you’re aiming to save $1000 per year for car maintenance costs, you’d set up a savings account and transfer ~$100 to it each month. 

Extended warranty 

If you don’t have the resolve or enough cash on hand to commit to an emergency fund, your best bet is probably an extended car warranty. With this method, you pay a flat monthly fee for extended coverage. When your car breaks down your only added cost is the deductible on your contract, no matter if you’re dealing with a minor issue or a major repair. 


Which method is right for you? 

There’s no right or wrong answer here. It all comes down to knowing your personal approach to finances. To help you decide, consider how you’d react if your car suddenly had a major breakdown. 

For example, let’s say your car had a sudden powertrain issue that cost thousands of dollars to repair. If you were paying out of pocket for those costs (emergency fund), you’d be on the hook for thousands of dollars. Would your emergency fund have enough to cover those costs? If not, an extended warranty may make more sense. 

Read more: Is an extended car warranty worth It? 

How to reduce car repair costs 

Here are some quick tips on reducing repair and breakdown costs in the long run. 

Stay on top of basic car maintenance 

Performing regular, basic car maintenance can help to keep your car in top condition and reduce long-term damage. 

At a minimum, make sure you: 

  • Check and replenish engine oil 
  • Check other car fluids 
  • Check the battery periodically 
  • Rotate and change tires 
  • Check the engine and cabin air filters 
  • Replace spark plugs as soon as is necessary 
  • Check engine belts for signs of wear, tear, and damage 
  • Replace windshield wiper blades 
  • Use an OBD-II scanner to assess what’s wrong (and take action) when the engine light comes on 

Avoid DIY repairs 

Unless you really know what you’re doing, DIY car repairs aren’t a great idea—especially for major issues. 

If you damage your car while you’re trying to fix it yourself, you may end up investing more time and money into the problem than you would by taking it to a mechanic who knows what they’re doing. 

Don’t settle for low-quality used car parts 

It’s tempting to use “aftermarket” or generic car parts to fix your vehicle because they’re so much cheaper than original equipment manufacturer (OEM) parts. However, some aftermarket parts can actually be bad for your car.  

Generic parts usually don’t come with a warranty. And if a generic part is lacking in quality it can cost you more in the long run, because you’ll need to replace it more often than an OEM part. 

Before you invest in a generic replacement part, ask a mechanic and check online reviews and forums to make sure that it’s up to scratch. 

Get more for your money. Get GuardTree.   

GuardTree is a comprehensive monthly extended warranty subscription that you can cancel at any time. GuardTree provides protection from most major electrical and mechanical repairs and offers additional benefits like roadside assistance and car rental and trip interruption costs. 

See what’s covered and use our price calculator to decide if an extended car warranty is right for you.