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Competitive Edge Blog

  • alison28006

Are you paying too much for your vehicle?

Are you trying to keep up with the Jones? Do you always want a new car? Do you really know how much you should be budgeting for your vehicle payments? A lot of people end up spending a fortune for their new car.

You should be aiming to spend no more than 15% of your take home pay cheque on your vehicle payment, insurance and gas. So say you wanted a brand-new Hyundai Santa Fe, which the (base-model runs about $33,000 and if you got an interest rate of 3.19%) your payment would be about $800 per month for 84 months, that’s 7 years folks.

To afford this vehicle means you would need to be taking home over $5000/month after taxes ($90-$100Kper year in salary). Depending on your unique situation, you may want to consider purchasing slightly used vehicles. They are still very reliable and offer a lot more value in price vs upkeep.

Still, we will always want something new to brag about! Saving just a little on a vehicle could really help your bottom line, and further your other personal goals! The end of the year always brings a lot of deals at the dealerships for buying new vehicles. So make sure you run some math to determine your total costs per month for your shiny new vehicle, and how that impacts your budget.

Knowing your numbers and staying within your budget, you can laugh your way to the bank and enjoy retirement sooner or go on that vacation you always wanted!

Until next time,

Christine Walters

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