Do It Yourself Car Service Payment Plan

Every so often I talk about my budgeted savings plans, and one of the ones that people find the most interesting is the way I save for my car maintenance.

The car maintenance program is easy and just requires that you have a savings account somewhere, and a place to track how much is in the fund. You don't need to open a new bank account unless you want to.

  1. At each 1,000 miles, you'll deposit $50 into the account.
  2. Once you hit 10,000 miles, you'll up that to $60 per thousand miles; and then raise it again by $10 each time you turn another 10,000 miles.
  3. Use that money to pay for all car maintenance, including manufacturer's recommended scheduled service, wiper fluid, tires, struts, alignments... basically, everything but gas.
  4. If you miss a deposit, then you'll need to catch up.
  5. If something costs more than the fund's balance, you draw the whole value of the fund and pay for the rest from your regular operating money. Then you up the payments by $10.
  6. When you're ready to move onto your next car, you liquidate the fund and apply it to the new purchase.
  7. If you can afford to save a little more aggressively, you can start at $60 per thousand miles instead of $50, and go up from there.

This plan reflects the fact that cars become more expensive to maintain as they get older. One thing you'll notice is that the fund gets quite a bit of money by the time you reach 40-50k miles. This is about the same time that you start looking at new tires, new brakes, replacing the muffler, and probably a major scheduled service, so make sure you keep depositing money even when there is a lot already.

By the time you're hitting 100k miles, you're depositing $150 every thousand miles. It's still less than a loan or a lease payment!

The only disciplines needed here are depositing the money, not spending it for other purposes, and tracking the fund's balance. Assuming you can do those things, you'll have an outstanding alternative to a service contract.