Ways to Use Your Income Tax Return Toward a New Vehicle

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

If you're planning to buy a new car, your tax refund may be able to help. You don't necessarily have to use the full amount as a down payment, but even a partial contribution can help you get a better loan or lease deal. Let's look at how your refund could help you before considering other options for using it.

Consider Buying a Pre-Owned Vehicle With Your Tax Return

Most people use their tax refund as extra spending money for the year. Or, they save it in their rainy day fund. But if you've been thinking about buying a used car, now is the time! You won't have to worry about dealing with the financial strain of making monthly payments. Instead, you'll be able to walk into any dealership and pay cash for the car.

Service Your Existing Vehicle

If you want to use your tax refund for a down payment on a new car this year but don't need one yet, consider using some of it for routine maintenance on your existing vehicle. This can improve its value and make it easier and more affordable to trade it in later on when you decide to start shopping for a new ride.

Pay Off An Existing Loan

If you already have an auto loan, using your tax return to pay down the balance can help lower your monthly payments and save you money over time. The average driver could save $1,221 by using their tax refund check as a down payment for their next car loan.

If you are looking to purchase a car, it's easy to see how a tax return can be used toward the purchase. However, it's important to note that this is only one of many ways to utilize your tax return. If cars aren't your thing, there are many other options available. If you have any questions, don't hesitate to contact us.