How to Buy a Car with An Income Tax Refund?

Are you hoping to use an income tax return to buy a new car? Whether you are looking to buy or lease a new car, tax season is always a good time for upgrading your ride. Many dealerships offer great income tax season offers. Typically, American taxpayers can get around $3,000 in tax returns each year. This means smart car buyers can utilize this money as a nice deposit towards their next vehicle which usually provides customers with low interest rates and even decrease regular monthly payments when financing.

how to use your tax return to buy a car

Buying a Vehicle with a Tax Return

If you want to invest your income tax refund on a new automobile purchase or lease, we have some excellent news for you. The typical income tax return is typically enough to cover a substantial part of the down payment. If you’re not wanting to get a new car, you can also use your refund to pay off a part or all of your existing auto loan.

If you have questions about using your tax return to get a new car we have some recommendations and ideas from our automotive financing professionals.


  • Using Your Tax Return Towards a Down Payment:

  • Our financing professionals suggest paying a substantial deposit to help you get automotive financing for your next vehicle. Even if you are opting to lease your new car, having a substantial deposit can help decrease your monthly payments. By utilizing your income tax return as a down payment, purchasers may get better vehicle funding choices.

  • Tax Returns For Used Vehicle Purchase:

  • While brand-new cars have their own set of benefits, a used automobile is an economical option for budget car buyers. With a little bit of research, it is very easy to find a good deal on a pre-owned vehicle. And savvy buyers can use their income tax refund as the down payment towards the purchase of that car.

  • Using the Cash On an Auto Lease:

  • Beginning a vehicle lease with a bigger down payment could significantly reduce how much the month-to-month payment will be. It is extremely beneficial also when customers want to prolong the lease due to the fact that most dealerships will generally permit the customer to extend their existing lease with a reduced monthly payment on a month-to-month basis.

  • Paying Off Your Current Car or Truck Loan:

  • Using your tax refund to pay off an existing automobile loan is also an exceptional idea. Customers can use that extra cash to substantially decrease the existing balance on their existing automobile loan. And they can do this either by making a few extra payments or by paying off the balance completely. Paying off or significantly reducing the remaining balance will lower the amount of interest that would have been paid with time.


How to Buy a Car with An Income Tax Refund? | Mike Smith Honda