Ways to Use Your Income Tax Return Toward a New Vehicle

If you're looking to buy a car, tax time can be your best friend. Instead of spending your return on a vacation or a shopping spree, use it as a down payment on the car you've been dreaming of. If you're still not sure if this is the right move for you, here are some reasons why using your tax return toward a new vehicle could be the financial decision for you.

Use Your Tax Refund Toward A Down Payment

One of the best ways to use your tax refund is a down payment on a new vehicle. The larger the down payment, the less you have to pay interest charges over time. Saving up for your down payment is also great if you plan and know you'll need to purchase a new vehicle shortly. When it comes time to apply for financing, we can help find the best auto loan that suits your needs and budget. The most straightforward way to use your tax refund toward purchasing a vehicle is to put it down on the car simply you're buying.

Consider Buying a Pre-Owned Vehicle With Your Tax Return

Dealership service teams thoroughly inspect certified pre-owned vehicles and come with excellent warranties. Newer models offer advanced safety features like rearview cameras and collision warning systems, which can help keep you safe while driving. Many also have infotainment systems that let you connect your mobile phone and stream music or podcasts from your favorite apps. Pre-owned models are often available for several thousand dollars less than their brand-new counterparts. And because they're cheaper to finance, you can afford a newer used car with your tax refund than buying a new one.

Service Your Existing Vehicle

Suppose you have neglected your vehicle's maintenance schedule and have a long list of items that need attention. Why not put that money toward servicing your existing vehicle rather than buying a new car? You'll get all the benefits of a new car, like a smooth ride and reliable starting and stopping, without the cost of a monthly payment.

Pay Off An Existing Loan

If you have high-interest debt (credit card balances, for example), then paying this down as soon as possible is often a wise move. You can dramatically reduce your interest costs over the life of the loan if you pay off higher-interest loans first. This is especially true if you are carrying credit card debt and paying interest rates around 15 percent or more. Paying down those high-interest loans may make more sense than investing money that could earn a lower rate of return.

While it may be time for a new car, the income tax return you just got back is a great way to start making that dream a reality. If you apply for a loan with direct lender bad credit auto financing options from our site, you'll get to the bottom of your finances in no time.