SUVs are flattening everything in their path, including the finances of people who buy them.
In both Canada and the United States, sales of cars are declining while demand for SUVs and pickup trucks rises. The market research firm J.D. Power says cars last year represented 27 per cent of retail vehicle sales, down from 42 per cent in 2014. Car sales fell 16.7 per cent in the third quarter while light-truck sales rose 4.8 per cent, says Desrosiers Automotive Consultants. The New York Times recently reported on how SUVs have sideswiped sales of station wagons.
The personal-finance angle on SUVs is that they cost more than cars. In an example I included in an article earlier this year on financial stress, the SUV version of one particular car model cost $10,000 more. It’s no wonder that, according to J.D. Power, the average monthly payment on a new vehicle loan is roughly $650.
We owned an SUV for a few years and loved how it accommodated the kids, the dog and all our stuff. SUVs totally make sense for busy families, provided they’re affordable. Three quick ways to tell if the payments for whatever vehicle you drive are contributing to your financial stress:
- You’re not saving consistently for retirement and/or our children’s college or university costs;
- Your monthly vehicle payment feels like a mortgage payment;
- You traded in a vehicle with an outstanding loan balance and folded that debt into a loan on the new vehicle.
Three more thoughts on how not to let SUVs flatten your finances:
- Buy a used SUV instead of new;
- Pick a vehicle for durability and drive it long enough that you have years with no payments;
- Resist the temptation – it’s hard – to buy a fully loaded version of the vehicle you like;
- Go with a car instead – hatchbacks are super useful, easy on gas and more fun to drive around town in a lot of cases.
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Ask Rob
Q: I recently upgraded my cellphone and changed carriers for better service. Because of the carrier change, a credit check was necessary. Equifax had my file flagged as deceased since 2017! How can this happen, and how can I correct it quickly?
A: Here’s a response from Julie Kuzmic, director of consumer advocacy at Equifax: “Death notifications are typically reported to Equifax by third-party agencies who collect this information from funeral homes. Sometimes deaths are reported to Equifax by the family members of the deceased individual with supporting documentation, generally a death certificate. On rare occasions, a funeral home transmits an incorrect SIN for the deceased individual. Sometimes it is the SIN of a surviving family member (such as a spouse) or it could be a typographical error. This may be the cause of your reader’s situation. The standard path for getting this corrected would be call the Equifax toll-free number and initiate the process to have the “deceased flag” removed from the file. (There would likely be a need to send in some documentation for identity verification purposes.)"
Here are toll-free numbers:
English: 866-828-5961
French: 877-323-2598
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
Are men and women different when it comes to money? Find out in the one-hour conversation that Globe and Mail personal finance editor Roma Luciw had with Kelley Keehn, a personal-finance educator and consumer advocate for FP Canada. (For Globe Unlimited subscribers.)
Video of the week
When is the best time to sell your house? Pinpoint advice here.
In case you missed these Globe and Mail personal finance-related stories
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- New CEO of the year: Susan Senecal revived the A&W brand by listening to what millennials want and giving it to them (for Globe Unlimited subscribers)
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