Ways to Use Your Income Tax Return Toward a New Vehicle

Are you looking for a new vehicle? Have you received your tax refund and don't know what to do with it? If so, you're not alone. Many people use their income tax return to get a new car or at least put money down towards the purchase of one. If you're unsure of which way to best use your tax refund toward a vehicle, we have some suggestions below that may steer you in the right direction.

Use Your Tax Refund Toward A Down Payment

One of the simplest ways to use your tax refund for an auto purchase is to put it towards the down payment on a car. The more money down, the less money you will have to finance. In turn, this will lower your monthly vehicle payments. This is an excellent option if you're starting in life and don't have much credit built up yet or are trying to build up your credit score. It can also be beneficial if you have bad credit or have had past financial issues that have left you with poor credit.

Consider Buying a Pre-Owned Vehicle With Your Tax Return

One of the easiest ways to get the most mileage out of your tax refund is by spending it on a pre-owned vehicle. Compared with new cars, used cars can be less expensive and even still under warranty. You can also use online resources such as Kelley Blue Book or Edmunds to determine a fair price for particular makes and models of cars based on their age and condition. Use this information to negotiate with car dealers or private sellers and ensure you don't overpay for a used vehicle.

Service Your Existing Vehicle

The most important thing you can do for your future car purchase is to make sure your current vehicle is in good working order. If you've been putting off oil changes or tune-ups, use your tax refund to get those things taken care of. The last thing you want is for something to go wrong with your car as you're getting ready to drive away in your new one.

Pay Off An Existing Loan

If you have an existing loan on your current car or another loan or credit card, using your tax refund may be a useful way to pay that off. You are paying off as much debt as possible means lowering your monthly expenses and freeing up cash flow for other expenditures - like buying a new car.

Please get in touch with one of our friendly sales representatives for more information about the many ways you can use your tax return for a new or used car purchase.