While some people grumble during tax season, it’s a time to celebrate if you’re getting a refund. That influx of cash can go a long way, especially if you use it toward a car. You have a few options for this, so go over some ways your tax refund can help you purchase a car.
Reduce the Loan With a Large Down Payment
A 10 percent down payment is standard, but you can go above that when using your tax refund. If possible, make a down payment of 20 percent or more to reduce your monthly loan payment. Additionally, a large down payment will reduce the amount you pay in interest, so you’ll save in a couple of different ways with this strategy.
Increase the Down Payment by Trading in Your Vehicle
You can make a sizable down payment with your tax refund, but why stop there? Consider trading your existing car into the dealership when buying your new one. Then you can put the money from the trade into the down payment, too.
You don’t even have to go to the dealership to find out how much your current vehicle is worth. Most dealerships let you value the trade on their websites, so you can get an estimate before heading over to get your new car.
You might also like: Hosting Guests? Make Sure Your Home Is Ready
Get More Bang for Your Refund by Buying Used
It’s no secret that cars depreciate shortly after they’re sold, meaning you can buy a used car for much less than a new one. Your tax refund might pay for the used car in its entirety, but if not, you can make a huge dent in the cost by using your full refund.
Keep in mind that there are different types of used cars. If you want the new-car experience for less, go with a Certified Pre-Owned vehicle. These vehicles are on the newer side and must pass a rigorous inspection to get approved. Plus, Certified Pre-Owned vehicles come with warranties, so you’ll enjoy peace of mind while paying less for your vehicle.
Barker Buick GMC in Houma, Louisiana, makes it easy to turn your tax refund into a vehicle. You can value your trade, apply for financing, and estimate your monthly payments online. Then head over to look at our new, Certified Pre-Owned, and used offerings. The team will help you find the best value for your buck to get the most out of your refund.