If you're expecting a tax refund this year, it's time to start thinking about how you are going to spend the money. It may be the case that you intend to put the entirety of your refund into your savings, and that is a wise decision. However, out of necessity, many people will choose to put their tax checks towards something vehicle related.
Buying, Making Payments On or Maintaining a Vehicle
What is your immediate automotive need? Do you need to buy a car? Or, are you committed to making high payments on a vehicle you already own? Maybe the car that you're currently driving is in dire need of repair work. Whatever the case may be, your tax refund can help with your vehicle situation.
- Your refund would make a great down payment. While it may be tempting to just buy a super cheap car and be done with it, that's probably not the best option. Sure, financing a new car or a really good used car means that you'll have a monthly payment for a while, but there are a lot of benefits too. You will have regular access to reliable transportation as well as an opportunity to build your credit with every timely payment.
Are you expecting a really substantial refund? Here's a thought: You could split that sum in half and use part of it as your down payment and put the other portion in a savings account. This way, if an unexpected expense comes up and you know that making your car payment will be tough one month, you'll be covered.
- Pay for the car you already have. If you still owe a large amount on your current loan, now may be a good time to ease your financial burden a bit. You can do one of two things to knock down your balance. Your first option is to use your tax refund to make an extra payment or two, and this will allow you to pay off your loan sooner. Or, if your refund will cover it, you can simply pay off your entire loan balance. By doing this, you will effectively eliminate any future interest that you would have paid.
- Repair or upgrade the vehicle you own. Even if your car has 100,000 miles on it or more, there could be some life left in it. There's a good chance that it is completely paid for, so, as long as you know that it's safe, enjoy as many payment-free months as possible. Use your tax money to get a full inspection and address any and all potential maintenance issues. Investing in new tires is always a good move because just doing this will enhance your ride quality, reduce road noise and improve your fuel economy.
Remember that your tax refund isn't free money. It's your money that you've worked hard to earn. So, however you decide to spend it, think about your decision and make sure that your plan will provide you with long term benefits.
The Best Financing for Any Time of the Year
Whether it happens to be tax season or any other time of the year, sometimes a vehicle purchase is inevitable. If you need to buy a car, but you're worried that a damaged credit history will prevent you from getting approved for an auto loan, Auto Credit Express can help. We'll connect you with a dealer in your area who is qualified to work with your situation.
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