New cars have been uncomfortably expensive for a while now. Thanks to now-higher interest rates, however, payments on new automobiles have reached wildly high levels. Credit bureau Experian reports that the average payment on a new car stands at a shocking $765 per month.
For most households, buying a vehicle now means some pretty creative money management.
Here's an idea: Although it's certainly not what most people intended for their investment portfolios, why not use higher-yielding dividend stocks to help cover at least some of the cost of financing a new car?
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Oil and gas pipeline operator Enbridge (ENB +0.42%) is a prime candidate. Its trailing dividend yield stands at 6%, based on a quarterly payment of $0.97 per share, or $3.88 per year. If you wanted to cover the entire monthly payment of $765 for a new car, you'd need nearly 2,366 shares of ENB, which would yield the $9,180 you'd need on a yearly basis to cover this cost. At today's prices, that's just over $109,000 worth of Enbridge stock.
Again, this isn't something that most investors were anticipating they might need to even consider doing just a few years ago. Desperate times call for creative thinking, though. At least with this scenario, you have the benefit of owning a stock that's now raised its annual dividend payout for 31 consecutive years.
NYSE: ENB
Key Data Points
The one idea that might not help as much as it has in the past? That's buying a used car. While they are cheaper, they're not leaps and bounds cheaper anymore. Experian's numbers say the monthly payment on the typical used car stands at $542. You'd still need 1,676 shares of Enbridge to cover these payments, which is nearly $77,500 worth of the stock at its price right now.
This arguably isn't the best all-around idea for actually funding the purchase of a new automobile, particularly if this money is earmarked for retirement.
