Ways to Use Your Income Tax Return Toward a New Vehicle

In the US, many people dread getting their income tax returns. This is because they might get more IRS penalties and debt than they expected. But if you're one of those lucky people who get a tax return every year, you can use your extra cash to buy a new car.

Use Your Tax Refund Toward A Down Payment

One of the best uses for your income tax return is to make a down payment on a new car. The more money you can put down, the more likely you will be approved for a car loan, get better interest rates and enjoy lower monthly payments.

Consider Buying a Pre-Owned Vehicle With Your Tax Return

Consider buying used. A pre-owned vehicle will likely cost you less than buying new, which means that you may need less cash upfront to make a purchase. While it's possible to buy used without making any down payment, putting money down may help you secure more affordable loan terms and monthly payments.

Service Your Existing Vehicle

In general, the longer you have owned a car, the more likely you have to start making some repairs. If you own a newer vehicle and have extra money toward your car payment, this might be an excellent time to consider an extended service contract. You will pay a bit more for an extended service contract than you would for just repairing what needs fixing now. However, if there is something wrong with your car now or if it's likely something will go wrong soon, the cost of an extended service contract can be worth it because it will save you from having to spend additional money on repairs in the future.

Pay Off An Existing Loan

If you're looking for a way to reduce the debt on your car loan, consider using your tax refund toward the loan's balance. Even if you don't have enough money in your refund to pay off the entire loan, reducing the principal can result in lower monthly payments and help you get out of debt faster.

If you're in the market for a great deal on a car, be sure to contact us here at Reliable Hyundai. We'll walk you through every step of the process, from picking out your car to questions about auto financing. And even if you don't use your tax return to buy a new car, we can still help you save money by finding an affordable deal on a used model.