Using Your Tax Return as a Down Payment on a new Car

Using Your Tax Return as a Down Payment on a new Vehicle

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With the average American tax return at around $3,000 in 2020, tax season is an ideal time to purchase a new vehicle. The tax refund offers an influx of funds each year that provide the perfect opportunity if you’re looking to get into a new (or used) set of wheels.

First, you should determine whether or not your budget and your life circumstances make buying a new or used vehicle appropriate. If your budget can handle the price of a new vehicle and all of the additional costs that go along with it, then consider a new car. If your budget is not quite ready for the price tag of a new car, then many dealerships, like World Car Nissan and its affiliates, offer a wide selection of pre-owned vehicles at affordable prices. World Car even has a certified pre-owned inventory that offers benefits like limited warranties, roadside assistance and rental car reimbursement. Once you determine what type of car is best for your budgetary and driving situation, then it’s time to look at your financing options.

When purchasing a car, you have the option of direct lending or dealership financing to pay for the car. With both options, you will pay, over time, the amount financed plus a finance charge. With direct lending, the loan comes directly from a bank, finance company or credit union. With direct lending, you can comparison shop to different lenders and discover the various credit terms available. You can also know your credit terms in advance of purchasing your car. With dealership financing, you obviously get financing through the dealership but the dealership often sells the contract to a bank, finance company, or credit union that services the account and collects payments. The benefits of dealership financing include the convenience, multiple financing options and often, specials that offer incentives for buyers. Whatever method you choose, be sure you negotiated the best price for your vehicle and your financing terms. Thanks to your larger down payment due to your tax refund, even if your credit is not so stellar, your down payment could really help lower your monthly payments and the overall amount you will pay for your new or used car and help you get approved.

If you decide to use your tax refund for a down payment on a new or used vehicle, remember it’s always important not to rush into your purchase and always comparison shop for the best car and best price that fits your budget. Don’t forget to ask about any specials on the cars you’re looking at and consider using just a portion of your tax refund if that will get you to the price you want on your car. Whatever the case, new or used car, and whatever type of financing, just remember that you’re going into the situation armed with cash for a bigger down payment and with that, you’re already a step ahead in the car-buying process.

If you're ready to begin your new car journey today, be sure to check out our assortment of new and re-owned vehicles by clicking the links below. If you are interested in further reading or find yourself in an upside down car loan situation, please take a look your options via the article link below. World Car. . .We'll see you soon!

New Nissan Inventory

Pre-owned Nissan Inventory

Upside-Down Car Loan