SUVs dominate auto sales these days, but there’s a key feature of these vehicles that bugs a lot of people.
It’s fuel economy. DesRosiers Automotive Consultants did a survey of what Canadians dislike about their vehicles, and fuel economy was mentioned by 20.9 per cent of the 4,500-plus vehicle owners who participated. Technology/features was mentioned by 14 per cent and mechanical issues by 10.6 per cent. Arguably, people who complain about fuel economy are really saying they’re unhappy with how much it costs to operate their vehicle.
SUVs are awfully useful – they’re the cargo-swallowing station wagon of the past updated to lose the brick-like shape and add the security of four-wheel drive in many cases. But they also drag down the finances of their owners.
It’s not just the cost of gas and insurance. SUVs are extremely profitable for the auto industry because they’re in demand and thus command higher prices than cars. The rise of SUVs is a big reason why the average monthly payment on a new vehicle loan is close to $675, according to J.D. Power. And that’s with just over half of new vehicle loans lasting 84 months or longer.
Some encouraging news: The popularity of SUVs has caused the auto industry to offer these vehicles in a greater variety of sizes and configurations. You’ll still pay a premium over a comparable car, but at least you have more options to look at in finding something that you can comfortably afford to purchase – and gas up every week.
DesRosiers Automotive Consultants Inc.
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Rob’s personal finance reading list…
For those who want to work in retirement
After writing recently on why we have to stop thinking retirement past age 65 is a failure, I was glad to come across this list of six questions you should ask yourself if you want to work in retirement.
Should you tip when buying coffee?
A U.S. survey says most people tip when buying coffee and, yes, baristas notice. Food for thought if you frequent a particular coffee spot.
RRSPs losing popularity
A summary of the latest contribution numbers for registered retirement savings plans. Use of RRSPs is definitely not keeping up with growth in the number of total taxpayers.
When smart people meet smart scammers
A first-hand account of how a writer was taken in by a scammer who asked him to buy iTunes cards. A great lesson on how we all need to up our game against increasingly sophisticated and sneaky scammers.
Ask Rob
Q: What is a good shorter-term RRSP investment? I don’t need to hit a home run on growth. I will withdraw $25,000 in 2020 and $25,000 in 2021.
A: There is no such thing as a good shorter-term investment. It’s too risky to expose money to the stock market if you can’t wait at least five years and preferably 10 or more. For the money you’ll need in 2020 and 2021, consider a high-interest savings account or guaranteed investment certificates.
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
Five useful retirement calculators.
In case you missed these Globe and Mail personal finance-related stories
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