Ways to Use Your Income Tax Return Toward a New Vehicle

If you're expecting a big tax refund this year, you may be looking forward to cashing that check and spending it on something exciting - like a new vehicle. You can, of course, use your tax refund for a down payment on the car you've been dreaming about. And there are plenty of other innovative ways to use your tax return toward owning a new car.

Use Your Tax Refund Toward A Down Payment

First, you can use your tax refund as a down payment for a new vehicle. While this may not be the only cash you need for a down payment, it's a good start. In addition, if you're able to put more than 20% down on your new vehicle, you'll avoid paying expensive private mortgage insurance (PMI) fees. Here are some other tips to help you save up for a down payment on a car.

Consider Buying a Pre-Owned Vehicle With Your Tax Return

If you don't think that the tax return amount is enough to cover the cost of a new vehicle, then consider using it toward one of our pre-owned vehicles. Many shoppers opt for used cars because they offer greater affordability and lower monthly payments than buying new ones. Check out our guide on how much car you should buy to determine what kind of vehicle best fits your budget.

Service Your Existing Vehicle

If you're still driving the car you had when you first got your license or bought it from an individual off Craigslist, you might want to use your tax refund for repairs or maintenance on your existing vehicle. Regular maintenance can help prevent future problems with your car or truck, and in addition to helping it run better, it could even increase its resale value.

Pay Off An Existing Loan

If you have an existing loan on your car, using your tax return to pay off that loan is also a great option. This isn't the most exciting way to spend your refund, but it will put more money in your pocket over time by getting rid of interest payments each month. This also frees up your budget every month because you won't have to make a monthly car payment anymore.

If you have any questions about ways you can utilize your tax return toward a new or used car, don't hesitate to get in touch with one of our friendly sales representatives.