Owning a vehicle can be an expensive prospect, especially when we consider the inevitable cost of maintenance and repairs. It's also a necessity for countless Americans, particularly those for whom public transportation isn't an option. But new data from Ally Financial reveals that many Americans aren't equipped to handle a major car repair.

Over the past five years, 51% of vehicle owners faced significant auto repairs. Of those, 80% spent $500 or more. Yet millions of Americans don't have the money on hand to pay for that sort of bill. Data from the Federal Reserve Board released earlier this year tells us that 40% of U.S. adults don't have enough cash in the bank to cover a $400 emergency. Rather, they'd need to charge that sort of expense on a credit card or sell something in the absence of having the money.

Woman standing in front of car with hood up on the side of the road

IMAGE SOURCE: GETTY IMAGES.

If you own a vehicle and don't have a decent chunk of savings at your disposal, you might one day find yourself with no choice but to fall back on a credit card when that car needs work. And that's a mistake that could not only cost you more money, but also damage your credit as a result.

The problem with credit cards

What's wrong with charging a modest expense on a credit card? Nothing, if you manage to pay off your entire bill by the time it comes due. But if you don't do that, you'll accrue interest charges for as long as you carry that balance, and those will only add to the cost of that existing expense.

Not only that, but the higher a balance you carry, the more you risk damaging your credit score. Of the different components that go into establishing a credit score, your credit utilization ratio is one that carries a decent chunk of weight. That ratio measures the amount of available credit you're using at a given point in time, and if it climbs too high, your score could take a nosedive. If you charge expenses and don't pay them off, that's exactly what will happen, which is why relying on credit cards is a horrendously bad idea.

And that's why you need emergency savings at all times, regardless of how old you are or what your bills look like. Without that safety net, you'll often have no choice but to resort to debt, which could lead to a world of trouble.

Ideally, your emergency fund should contain enough money to cover at least three months' worth of living expenses. If you can aim for six months' worth, even better. But for starters, do your best to accumulate some savings -- if you own a vehicle, you might need it sooner rather than later.

Building your cash reserves

Of course, establishing emergency savings is easier said than done, so pace yourself. No one expects you to accumulate three months' worth of living expenses overnight, but if you save a few hundred dollars each month, you'll be better off than someone with nothing in the bank.

To make a dent in your savings, examine your budget (or create one if you don't already have one in place) and find places to cut corners. That could mean cooking at home instead of dining out or downsizing your apartment to a smaller, less expensive space. At the same time, consider taking on a side hustle to drum up extra cash. Since the money you earn from a second gig won't already be earmarked for expenses, you should have no problem sticking it directly into the bank.

Finally, be smart about banking whatever extra cash you come into, whether it's a bonus at work or a birthday gift from a relative. Putting a few hundred dollars into savings every so often will get you much closer to your ultimate goal.

Auto repairs, like other life expenses, are often unavoidable, but you can prepare for them by having a savings account to fall back on. It's a far better bet than allowing your vehicle to drive you into debt and upend your finances in the process.

Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.