Take your time.
From the bank to the grocery store, every business knows it’s tax refund check time. And they all want a piece of your check. If you jump on the first flashy deal you see, you may miss out on an even better one a few miles away. Do your research and avoid acting impulsively to help make sure your tax refund check is wisely spent.
Stick to used cars.
Buying a used car means less of your tax refund check will be eaten up by depreciation. According to CarMax, cars lose about 10% of their value within the first month of being driven. After 12 months, their value has decreased by more than 20%.
Let another driver eat the biggest dip in depreciation. Analysis from U.S. News & World Report shows that the best way to find the cheapest car is to buy the oldest modern card you can find in good condition. Models that are 2012 and newer will have more safety features, as that’s the year electronic stability control became mandatory for all cars. Buying a rental car is another great option for saving money on a newer, reliable ride.
Buy from a private party seller.
When you have cash in hand, buying a car from a private seller can be one of the best ways to save money. Absolutely $0 of your tax refund check will go toward sneaky dealership fees. As Consumer Reports warns, dealership fees can include:
- A destination charge: The cost to deliver the car from the factory to the dealership
- Title and registration fees: The price to have the dealership handle ownership transfer, temporary tags, etc.
- A documentation fee: $150 to $300 for processing title and registration documents
- An advertising fee: A fee sometimes tacked on by regional dealers to help cover marketing expenses
- A Dealer markup:The additional price you have to pay to drive away with a car that's in really high demand
Together, all of these fees could total thousands of dollars and consume your entire tax refund check. Go with a private seller and you won’t have to pay any of them, as private sellers are not dealers and have no overhead costs.
Don’t go with your first financing option.
Instead, compare auto financing options to make sure you’re picking your best loan offer. We know it’s tough to wait when you have a cashed refund check in hand. You want to buy a car fast, and you don’t want to wait. But comparison shopping doesn’t have to take more than a few minutes. You can submit one auto loan application through myAutoloan and quickly receive compare up to four loan offers. There’s no need to navigate to different websites, submit different forms, or even drive to various places around town.
Shop local around tax time.
Buying a car around tax time has two benefits. One, you likely have a tax refund check. Two, the auto industry tends to see a slowdown around tax time, which is good negotiating leverage for you.
“Ask any small business owner who is not in the tax business and they will tell you that business always sees a cyclical slowdown in April. The reason being that plenty of people owe taxes by April 15,” says the Financial Samurai.
While other folks are pulling from their savings account to pay Uncle Sam, you can use your tax refund and savings to put down a sizeable down payment on a car—assuming you don’t owe a hefty amount of taxes, too.
Start with myAutoloan.
We’re all about getting you more financing for less hassle. Fill out a quick auto loan application for a used car and get ready to enjoy a newer car, all thanks to your tax refund check and money-savvy research!