Budget Strategies

Budget Strategies
Helping customers understand repair costs can provide big benefits. (Photo: Steve Pawlett)

Helping our clients plan will give them less financial stress and allow them to keep their vehicles running longer.

Recently, we had a client whose vehicle inspection showed a lack of maintenance. Most items on her 2005 Toyota Corolla were routine items such as filters, fluid services, brakes, and tires. There was no other concern with her vehicle. To catch up on these items, the cost was over $2,500. My client then debated if the vehicle was worth the cost or if she should buy another one. Here’s the thing: she still owed money on the car (she had bought it used) and was considering financing another one.

To be honest, lack of maintenance is a habit and not a result of what vehicle owners drive. The reality is that many owners don’t know how much money they should set aside for auto maintenance and repairs.

The budget conversation

The average Canadian owes approximately $1.70 for every dollar of income earned, after taxes. Helping clients plan their finances isn’t really our role, nor is it our expertise. Having said that, we want the opportunity to have the budgeting conversation with our clients, so they have a sense of their true cost of ownership. Even if a client takes his or her vehicle into a shop that is strong with preventive maintenance, most clients still operate their budget with a breakdown mindset.

I’ve read statistics about Canadians spending anywhere from $800 to $1,500 per year, depending on their vehicle’s age, how much they drive, and where they live. What some of the data doesn’t capture is the actual cost since these numbers are only what clients spend. Have you recommended a worn ball joint replacement before and had your client defer it? The vehicle needs it for safety reasons, and it won’t be accounted for in the statistics reported. At our shop, we recommend budgeting at least $100 per month per vehicle as an average target.

Look at their history

Depending on what software you use, you may be able to pull up a “lifetime spend” amount for each client and/or vehicle. We have used this number to calculate the per month cost of maintaining a client’s vehicle. Another client with a 2007 Toyota Camry at 141,000 km mentioned that she felt like she was spending a lot on car repairs. Her lifetime spend to date was $11,210 and her first invoice date was December 2014. With 51 months total since her first invoice date, that would mean she spent $220 per month. When you take that into consideration against a monthly payment on a new Toyota Camry, it wouldn’t be close. You also aren’t locked into a payment plan for the next five years. Now, if the client wants a new car, then we can really come up with any reason for her to get into a new one.

Helping our clients plan will give them less financial stress and allow them to keep their vehicles running longer. It will also help service shops do their job well in keeping vehicles safe, roadworthy and in good condition so they last longer.

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