Using Your Tax Refund to SAVE on your Next Car
According to the Internal Revenue Service, the average federal tax refund is about $3,000. Many people wonder "What is the best way to spend this money?" However, did you know that using this money on a down payment for your next car could save you money over time?
Tax returns are seen as a kind of "bonus money", but it's really just money you get back from your taxes. The thing is, it changes and fluxuates, so most people dont include tax return numbers in their personal budgeting - so it ends up feeling like a big bonus!
Here are some easy tips when it comes to buying a used car with your tax return.
1. Try to put as much down as you can
2. Bundle your refund with other options like a trade in
3. Play with the down payment to see different monthly payment options
4. Check your credit score and resolve any issues if possible
5. Be aware of all of your monthly bills and payments
1. Put down as much as you can
Having a large down payment is one of the most important things you can do when securing an auto loan. If you have low or poor credit, using your tax return as down payment could make it easier to get financed. It will also dramatically lower your monthly payment!
2. Bundle your refund
Save even more on your monthly payments when you combine your refund as a downpayment and include a trade in - you'll be surprised over how much money you'll save monthly!
3. Play with the down payment to see different monthly payment options
Depending on how much you put down, the monthly payment amounts will fluctuate - but so will your interest rate! So play around with the numbers a bit so you have a good idea of your options.
4. Check your credit score
Using websites like www.CreditKarma.com, you can check your credit score instantly. Some things to be aware of would be marks on your credit from missed payments or hard inquiries on your credit. If you do have a missed payment, and have a good reason for missing the payment, you can write to the debt collector in what's called a "Goodwill Letter" to appeal to have the bad marks removed.
5. Be aware of your costs and bills
Take special note of how much money you're spending per month. This should help you determine the amount of money you can safely spend on a car every month while still having enough left over for the other expenses in your life.
Here at Midwest Motors in Eureka, we want to help you get into a great used car with your tax return! We have Chevy, Ford, Dodge, Mercedes, BMW, Infiniti, Jeep, and so many more models to choose from. Click above to view our inventory, and give us a call to get into a brand new car with your brand new tax refund!
