The Risks of Buying Used in 2025
In Part 1 of our used car Debt Trap series, we covered how buying your used car in 2025 shifted from a smart money-saving option to a high-stakes financial gamble. The used car market, hindered by low inventory, persistent supply chain issues, inflated prices and threatening tariffs are creating conditions where used car buyers face mounting debt and long-term financial risk. We also learned from Bloomberg recently reporting that consumers are struggling to keep up with auto payments after years of inflated prices, easy credit, and high interest rates.
In this follow-up, we dive deeper. What happens when that off-warranty vehicle needs repairs? What do those repairs really cost? And most importantly—how do you avoid ending up in this situation in the first place?
Buying Used Isn’t the Safety Net It Once Was
Buying used may save you money in the short term, but when something breaks down mid-loan and out of warranty, the real cost becomes clear. For many consumers, especially those who financed their used vehicle with a high-interest loan, a single repair can lead to compounding debt, missed payments, and potential loan default. What used to be a reliable cost-saving strategy is now a financial gamble.
The combination of inflated prices, long loan terms, and vehicles loaded with expensive tech has made used car ownership more unpredictable than ever. Most buyers are still making payments when parts start failing. And with limited warranties or none at all, those costs come straight out of your pocket.
Why These Repairs Matter More Than Ever
In today’s financing environment, most buyers are still making payments on a used vehicle when these repairs hit. A failed alternator or AC compressor in year two of a six-year loan leaves you choosing between a costly repair or continuing to pay for a car you can’t drive. Worse, if you miss payments during this time, the loan doesn’t go away. It goes into default.
Additionally, electrical systems in newer used cars complicate repair costs even more. Features like lane assist, adaptive cruise control, and infotainment modules often require specialized diagnostics and parts, which are rarely covered by extended service contracts. As these systems age, failure becomes more likely and much more expensive to fix as reported by AAA.
The Real Cost of Common Repairs
When a used car is out of warranty and a major part fails, you’re on the hook. Below are the most common failure points, what they do, and what they’ll likely cost you in 2025, including price increases tied to new tariff hikes on imported parts:
- Battery: Powers the car’s electrical system and is essential for starting the engine.
- Average Cost: $325
- Tariff-Adjusted Cost: $425 or more
- Labor: $50 to $75 per install
- Brake Pads and Rotors (per axle): Critical for safe stopping and wear down with use.
- Average Cost: $675
- Tariff-Adjusted Cost: $825 or more
- Labor: $200 to $300 per install
- Tires (Full Set): Maintain traction and ensure safe handling.
- Average Cost: $750
- Tariff-Adjusted Cost: $950 or more
- Labor: $80 to $150 to install
- Alternator: Keeps the battery charged and powers the electrical system.
- Average Cost: $775
- Tariff-Adjusted Cost: $950 or more
- Labor: $200 to $350 per install
- AC Compressor: Controls refrigerant flow in the AC system.
- Average Cost: $1,050
- Tariff-Adjusted Cost: $1,350 or more
- Labor: $300 to $500 per install
- Transmission (Rebuild or Replace): Transfers power from the engine to the wheels.
- Average Cost: $4,500
- Tariff-Adjusted Cost: $6,200 or more
- Labor: $1,000 to $1,800 per install
And that’s just the repair costs. Add towing fees, time without transportation, and missed work, and the financial pressure quickly builds.
The Impact of Tariffs on Repair Costs
Most modern vehicle components — from transmissions to alternators — are manufactured overseas. With the 2025 implementation of a 25% tariff on imported auto parts, the price of these already-expensive components has surged according to CapWolf. For consumers, that means a repair that once cost $800 could now exceed $1,000, not including labor. These tariffs quietly increase the financial burden on drivers, especially those still making monthly payments on used vehicles. As more repairs fall outside of warranty coverage, the cost gap created by tariffs turns routine maintenance into a serious budget strain.
A Financial Meltdown in Slow Motion
You can now see how a $600 repair can become a $3,000 problem. Auto repairs delay other bills, increase credit card use, and in many cases, trigger auto loan delinquencies. And once the lender sends the debt to collectors, your financial options start to shrink.
At Guardian Litigation Group, we work with clients who are facing the ripple effects of auto loan delinquencies. They bought vehicles that seemed reliable and affordable, only to be buried in repairs and trapped by loan terms that didn’t account for real-world costs.
What to Do Before the Damage Spreads
If you’ve had your vehicles repossessed and are dealing with third-party collections. Guardian Litigation Group can help you understand your rights, negotiate with lenders, and develop a legal plan to defend your finances. Let us help you take back control before the next bill pushes you further behind.
Want to Avoid the Pitfalls? Here’s Where to Start
Looking for a used car that won’t ruin your finances? According to Consumer Reports, these five models consistently offer reliability, low repair costs, and strong resale value:
- Toyota Corolla (2018–2021): Known for long-term reliability, with easy-to-source parts and modest maintenance costs.
- Honda Civic (2018–2021): High fuel efficiency, dependable performance, and widely available repair services.
- Mazda3 (2019–2021): Stylish and sporty, with a strong track record for reliability and low long-term ownership costs.
- Subaru Outback (2017–2020): Great for families or outdoor lifestyles, and built with durability in mind.
- Hyundai Elantra (2019–2021): Strong warranty options and lower-than-average repair frequency.
Each of these vehicles offers a better shot at avoiding breakdowns and surprise expenses. They’re also easier to repair, with commonly available parts and straightforward servicing requirements. In a market where every dollar counts, these models provide the peace of mind buyers need.
People Also Question:
What’s the safest way to finance a used car in 2025?
Secure financing through a bank or credit union with a fixed interest rate and avoid long-term loans that stretch past 60 months. “Buy here, pay here” dealerships often charge extremely high APRs, which can trap you in negative equity quickly if something goes wrong.
What is negative equity, and how does it affect me?
Negative equity happens when the remaining balance on your auto loan is higher than the current market value of your car. This becomes a serious issue if the car is totaled or breaks down beyond repair, because you’re still legally responsible for the loan, even without a working vehicle.
What happens if I buy a car and it breaks right away?
If your car fails shortly after purchase, and you financed it, you’re still legally responsible for the loan. Unfortunately, most used cars are sold “as-is,” leaving you with little recourse unless the seller committed fraud or failed to disclose known defects.
If I surrender the car, can I still be sued for the car loan?
Yes. Voluntarily surrendering a car (also known as a “voluntary repossession”) does not cancel your loan. If the lender resells the car for less than what you owe, they can sue you for the “deficiency balance.”
Can I stop paying if my car doesn’t work anymore?
Stopping payments without a legal basis puts you at risk of repossession, lawsuits, and wage garnishment. However, if the vehicle was repossessed and you are dealing with third-party collections, Guardian can step in.
Can Guardian help if I got sued over a car loan?
Absolutely. We defend clients facing repossessions or if they need help dealing with third-party collections. Guardian provides legal representation in court, evaluates whether the debt is enforceable, and works to reduce or dismiss judgments. Our goal is to stop the financial bleeding and restore your legal footing.
How Guardian Litigation Group Can Help
This is where the Guardian Litigation Group steps in. In the past two articles, we dug deep into the financial pitfalls of owning a used car in 2025 — showing how even one unexpected repair can spiral into long-term debt. From tariff-inflated parts to tech-laden breakdowns, repair costs today are hitting harder than ever.
If you’re buried in bills from a car you still owe money on, or facing pressure after missing payments due to repairs you couldn’t afford, our legal team is here to help. We work with consumers to:
- Fight back if you are being sued by a third-party debt collector on a bad car debt
- Reduce collection efforts tied to defaulted vehicle loans
- Defend your rights when lenders or collectors cross the line
You don’t have to stay stuck in a financial trap. Connect with Guardian Litigation Group today and let’s figure out the best path forward—before the next breakdown leaves you without options.
The information provided in this blog article is for entertainment and informational purposes only and should not be construed as legal advice. It is not intended to create an attorney-client relationship.
