The federal tax refund on an average is $3,000. This can be used to buy a car of your dreams. Irrespective of whether you want to buy a new or used car, you can make use of the tax refund to do so. The money can be used to make part of the down payment.
Down Payment for New and Used Cars
A $3,000 down payment is really useful for car buyers with poor credit history. A good amount of down payment is an important factor in securing a car lease or loan. The reduction of the loan amount makes it easier to get the loan approved.
Drive Off Payment on Car Lease
Most car buyers tend to spend $1,000 on a new lease. When you make a higher down payment, the payments you make each month will be a lot less. The lower payments are easy to manage.
If you want to extend the lease, you can continue paying the lower amount each month. Leasing companies have different guidelines and you need to check whether this is allowed. Protect the payment using insurance. This is beneficial if you have an accident in the initial few months of driving.
Pay an Existing Car Loan
Use the tax refund to pay off a balance of an existing car loan. This means you carry less debt on your existing loan. You can choose to pay the balance or make an extra payment. The amount of interest that you pay gets reduced when you pay off a balance of the loan amount.
Upgrade or Fix Your Current Car
A well-maintained car costs a lot less than a new car. Use the tax refund to upgrade or fix your current car, so that it works as good as new.
Plan ahead so that you can make the best use of the tax refund to buy a car.
