“I’m going to buy a car with my tax refund” is the most recurrent phrase this season. The average American taxpayer received $2,577 as a tax refund in 2020, according to the IRS. This is money that many people have been eagerly anticipating, and they often use it as a down payment on a new car.
This strategy is not incorrect, as combining savings with the tax refund can give you greater negotiating power with your lender for a lower monthly payment and a lower interest rate. It’s also possible that, with the savings and tax refund combined, you could buy the car outright, especially if it’s a used car. Unless you’re obsessed with having a brand-new car, buying a second-hand vehicle has the great advantage of being much cheaper. You can get a practically new car, with two or three years of use, at 50% of the launch price.
You’re not the only one who takes tax refunds into account when visiting car dealerships. The car salespeople themselves launch super aggressive offers during this season to attract as many buyers as possible. They know that people have extra money to spend, and they’re on the hunt.
Therefore, even if you want to buy a car and have the money, the smartest thing to do is to prepare a budget that not only allows you to pay a good down payment but also leaves you with monthly payments that fit your income. In this budget, you should not overlook the cost of fuel, regular maintenance, and, above all, vehicle insurance.
If you have any doubts about how much insurance coverage you’ll need for the car you want to buy, call Univista Insurance. Not only will you get the right answer, but you’ll also leave with the best coverage on the market.
One very important thing: don’t go to the dealership until you have the check in your hands. Many people have gotten ahead of themselves and the check has taken longer than usual to arrive, causing them a real nightmare. “I’m going to buy a car with my tax refund.”
Call us today for a full qualification! 305-508-9575. You can also quote for free here.
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