With tax season coming to an end, people are now starting to think about what to do with the refunds they’ve gotten. It’s perhaps unfortunate, but far too many people squander their returns on a bunch of small items—going out to dinner, maybe a new TV set, or something similar. A few put it away for a rainy day.
Not a lot of people consider using it as part of a big purchase, like maybe that new car you’ve been wanting for months. Explore some thoughts, tips and advice for spending your tax refund on a car, and where you can get financing to cover the rest of the purchase to get going in style.
Tax Refund on a Car
There are a number of ways you can use your tax refund on a car. These include the obvious: using it to buy a used car, if it’s big enough. There’s also the option to use it as a down payment. But other options include using it to help to pay off your existing loan, refinance a loan, put a large payment on a lease, or even fund repairs or upgrade your existing vehicle.
Use It as a Down Payment
Aside from just buying a used car outright, if you’ve got enough in the bank, the most obvious use for your tax refund is to put it down on a car. This can take two forms: either you can use it to buy a new car, or put it toward a large drive-off payment if you’re looking at a lease deal.
This is a great use for your return. The larger your down payment, the better your finance terms will be and the lower your monthly payments. Even if you don’t have the greatest credit, a large down payment can still get you a pretty decent deal on a new vehicle. If you’re looking to get more car for a lower payment, you might consider a lease. However, know that at the end of the lease you’ll have to figure out what to do next.
Pay Off Your Existing Loan
If you’re currently financing or leasing a vehicle, you can use your tax return to pay off or pay down your existing lease or loan. This will enable you to carry less debt, increase your monthly earnings, and start squirreling away a nest egg for emergencies, in case your vehicle needs repairs, or to create a larger down payment for a later purchase.
If you’re currently paying a huge interest rate, you may be able to refinance if you have improved your credit or have a sizable down payment like your tax return. This can turn a huge monthly payment into a much more manageable one.
Repair or Update Your Vehicle
Finally, if you’re happy with your current car but it needs some repairs or updates, now is the perfect time. Fix the brakes, upgrade the exhaust system, or even install that satellite radio tuner you’ve been wanting, and turn your old car into a new one.
Of course, you’ll still need financing, especially if you want to buy or lease a new vehicle. Whether it’s to refinance an existing loan or buy a new or used car, Blue Sky can help. Fill out our easy and confidential form to get started on your deal today!