Is splurging on a car with your IRS refund an intelligent move? It’s tax season, and the IRS refund season is officially underway. According to statistics, about two-thirds of taxpayers will receive an average refund of $3,000 by the end of March. That’s extra cash in hand – perhaps to clear some overdue bills or, why not, finally get that dream car you’ve been eyeing.
But can you use your tax refund money to buy a car?
Utilizing your IRS refund to buy a car can indeed be advantageous. It’s unexpected money, a gift from Uncle Sam that allows you to make a substantial down payment without dipping into your savings.
For those with a less-than-stellar credit history, it’s a golden opportunity. Loan interest rates are directly tied to your credit score – the lower the score, the higher the interest rate. With a solid down payment from your tax refund, you pay less interest over the entire loan period.
Having established that using your refund to buy a car is a good idea, the next question is: when should you move?
Joining the March rush to dealerships might not be the most advantageous. The US Bureau of Economic Analysis (BEA) notes that March is one of the months with the highest sales of new cars. It stands to reason that during this time of heightened demand, car sellers need to be more flexible in lowering prices. They know there’s a swarm of eager buyers behind you, all looking to spend their tax refunds, and they use that demand to maximize their sales commissions.
If you’re not one to waste money, it’s advisable to wait until after the spring rush, when the surge of tax-refund-fueled buyers has subsided. Head to a dealership at the end of the month, when salespeople are usually more eager to meet their quotas and are more likely to offer discounts on the car you want.
When you’re ready to purchase, remember that Univista Insurance is your best choice for insuring your new car. Keep the dealer from pushing any insurance company of their convenience on you. Give Univista a call from the dealership, and let them find the insurer that best protects your wallet. Is splurging on a car with your IRS refund an intelligent move?
Give us a call today for a thorough assessment! (305) 985-4126. You can also get a free quote here.
