How Can I Use My Tax Refund to Buy a Car?

Tax season is right around the corner, and if you’re getting a refund, you’ll want to take the following steps to buying a new car:

• After you receive your refund, check your budget to figure out what kind of car you can afford.
• Decide whether to use your refund to pay for the car’s down payment, or to set the money aside to pay for future monthly payments.
• Consult with a trusted auto loan provider to secure financing.
• Go shopping for the car, truck, or SUV of your dreams.

Read on to learn more about using your tax refund to buy a car.

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What Kind of Car Can I Afford with my Refund Check?

After you receive your tax refund check, you’ll want to take a look at your budget and figure out what kind of used or new car you can afford. Be sure to take these steps:

• Make a list of features you can’t live without like third-row seating or advanced safety systems.
• Figure out if you can afford a new or used vehicle.
• When browsing your vehicle options, make sure you know the true cost of buying a car.

No matter what you do, make sure you’re prepared before you head to the dealership.

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Using Your Tax Refund for a Down Payment or for Monthly Payments

According to the IRS, the average American receives about $3,000 from their federal tax refund. That’s a big chunk of change, and if you use it to pay a down payment, you’ll enjoy the following advantages:

• A lower interest rate
• New financing options for buyers with poor credit
• Reduces the risk of the car loan going upside down

However, if you already have money set aside for the down payment, you might want to hang onto your refund and use it for upcoming monthly payments. That can help build your credit over the long term, and it’ll ease your month-to-month financial burden.

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Turn to Green Light Auto Credit with Your Tax Refund

Once you’ve figured out a plan, get in touch with Green Light Auto Credit. We work with dealerships nationwide to get you the auto financing you deserve, and we can help you answer any questions you have about car loans. Want to learn more? Check out our FAQs to see what other customers have asked about.

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