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.)

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.

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.

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.