Use Your Tax Refund to Buy a Car

September 15th, 2017 by

Use Your Tax Refund to Buy a Car

Use Your Tax Refund to Buy a Car

More and more Americans are using their tax refund to buy a car. And, with an average refund of $3,000, it’s easy to see why – that’s an excellent down payment on your next ride. However, you have more options here than you may know. Before you head to the dealership, read our guide to figure out how to best go about using your tax refund.

Use Your Tax Refund as a Down Payment

Making a down payment is the first step to owning a new car. And, because most people don’t include their tax refund in their budget, it’s basically disposable income. That means you’re free to start shopping for a new car. This is an especially great option for drivers with bad credit. Having a big down payment on hand makes it easier to get financing. (And, at our dealership, we’re happy to work to provide loans for drivers with bad credit.)

Make a Big Drive-Off Payment on a Lease

Ownership isn’t everything. Perhaps you prefer to drive a luxury car and, on top of that, to get a new one every few years. If that’s the case, leasing is a great option. If you start your lease with a large down payment, that will reduce your future monthly payments, making your new ride even more affordable.

Refinance Your Current Auto Loan

If you’re facing a steep APR on your current auto loan, refinancing is a great way to reduce your payments. That’s especially true if your credit record has improved since you first took out your loan. Use your tax refund to reduce the principal on your new loan and start making lower monthly payments.

Pay Down Your Auto Loan

Of course, you can also use your tax refund to get those pesky creditors off your back. If you’re in trouble with your current auto loan, making a few extra payments will help – or, if your refund is big enough, you can even pay it off. This will put you in a position to start looking for better financing options on your next car.

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