You got your W2s, you filed your taxes, and the refund is on the way! Now you’re probably thinking through the smartest ways to spend it. If you’re like a lot of people and your ride could be more reliable, (or more comfortable), you may be thinking of investing the refund of those hard-earned dollars in your wheels. Turns out there’s more than one way of spending your tax refund on a car. We know of at least seven!
1. Get a new (or new to you) car.
We’ll start with the obvious. There’s a reason you see so many TV ads (and direct mail ads, and radio ads, and newspaper ads…) coming your way during tax time urging you to rush to the nearest dealership with your tax return in hand. A lot of people buy a new – or new them – car during tax season. If you feel like your current vehicle may be down to its last few miles, or if you’ve just been saving your pennies to upgrade, tax season is definitely a great time to shop!
2. Pay off your existing vehicle loan!
If you’re not quite ready for a new ride, that doesn’t mean you can’t still spend your tax refund on a car. There’s nothing quite like the feeling of paying one off. You won’t miss that monthly payment one bit, and not having one frees up a lot of dollars for other needs or for padding that savings account, so if you want to spend your tax return on a car, but you aren’t ready to buy a new one, then pay that baby off!
3. Save money spending your tax refund on a car by refinancing.
Not every financing deal is the best one. Sometimes, you have to take the hit on interest rate because you don’t have quite the down-payment you’d like to have. Small down payments and less than stellar credit can be real rate killers when it comes time to get an auto loan. If you’ve been plugging away at payments and still have a lot more ahead of you, it doesn’t hurt to consider refinancing. Using your tax return as a hefty downpayment on auto loan refi could save you money in the long-run (in the short-run as those monthly payments go down). It’s a great way to get a little help out of that one-time tax check every month!
4. Start a new lease on a car with a big drive off payment.
According to Edmunds, it’s wisest to have at least a $1000 downpayment when you start a lease on a car. Fortunately, if you’re planning to spend your tax refund on a car, you may be able to put down even more than that. A bigger downpayment means lower monthly payments and as an added bonus, if you decide to extend your lease past the original terms, you may be allowed to extend that affordable payment on a month to month basis. Just read those contracts carefully and do plenty of research to make sure you’re making the lease downpayment that makes the most sense for you!
5. Use your tax refund for aftermarket upgrades.
Maybe you already own your car outright and don’t have any real need or desire to shop around for a new one. If so, congrats to you! It’s a great feeling to own a car you love! :-) If you’re lucky enough to be in that position, a great way to spend your tax refund on a car is to invest in upgrades! There’s are tons of aftermarket upgrades for all types of cars and trucks and it’s likely you’ll increase the value of your car with the right ones. So go ahead and look into those wheels, sound systems, cargo racks, and window tints you’ve had your eye on!
6. Spend your tax refund on car repairs.
Sometimes tax season rolls around just when you need it the most. A lot of people struggle with the cost of unexpected repairs and if you’re one of them, that refund check will come in handy. Not everyone needs a new car or a lot of fancy upgrades. Some people just need to spend their tax refund on their car to get it back on the road and running as smoothly as it could. Even if you haven’t had any major issues, it’s still a wise investment to have a mechanic give your car a good once over and make you aware of any needed preventative maintenance to avoid issues in the future.
7. Get that car insurance (and pay it upfront)!
Last but certainly not least, a great way to invest that tax refund in your car is to purchase or renew your car insurance! There a lot of benefits to paying for your premiums up front instead of making payments, so spending that tax refund now to avoid a monthly premium later will give you a lot of peace of mind – and few more dollars available in your monthly budget. Want to know more about payment options, just call us! We’re here to help!