Tax return for down payment

It’s that time of the year again…  Tax season.  You might already be thinking of smart things to do with that tax refund.  Many people use their tax refund as a down payment on a pre-owned vehicle.  Is it smart to do that? It’s your money, of course you can do whatever you like with it!  But the big advantage of using it towards a new vehicle is that it’s basically “found” money.  Now you certainly don’t need a big down payment to afford a pre-owned car, truck or SUV but you can actually save yourself money in the long run by putting more down up front.  Not only will that lower your monthly payment, but it could reduce your interest rate as well.  Having more money up front might also give you access to financing for a car you didn’t think was within reach.  So there are definitely some strong advantages to using your tax refund towards the purchase of a pre-owned vehicle.  Another thing to consider is that when you purchase pre-owned you don’t take the depreciation hit that the original owner took when they bought the car.  Smart shoppers buy used!

What if your current car still works fine?  Everyone’s situation is unique but you should start shopping while your current car is still in good condition and viable for private sale or trade.  This way you will get the most for your vehicle and that can help you with your new purchase.  Also this way you avoid being stranded by your car randomly breaking down and then having to find alternative transportation under pressure.

We hope this information has been helpful.  We are committed to helping you with any of your automotive needs, so please feel free to reach out anytime!