For many Americans, a tax refund can feel like a financial break. Many use the money to catch up on bills, to make larger purchases, or to set themselves up financially for the year ahead. If you've been thinking about investing in a new vehicle, tax season can be the right time to turn your refund into a down payment for a new or pre-owned vehicle. Before rushing to the dealership, a buying strategy can help you find the best vehicle for your budget and needs.
Vehicle Shopping Guide
If you plan wisely, your refund can help you in many ways with car shopping. It can help reduce your loan amount, lower your monthly payment, or even help you avoid financing altogether.
1. Choose between new and pre-owned vehicles. New and used cars each have their advantages and disadvantages. New cars may come with promotional financing, warranties, and the latest technology. Used cars may offer lower depreciation and reduced insurance costs.
Regardless of whether you purchase new or pre-owned, it's important to always test drive. For used vehicles, you may want to also review the vehicle history report and consider getting an inspection done from an independent party, when possible.
2. Research vehicles before going to the dealership. Online tools can help you shop for cars. From checking out a used vehicle's market value to comparing features, you can do a lot of research online before test driving. Reliability ratings, fuel efficiency, safety features, and cost of ownership may all be considerations for you to make, depending on your lifestyle, driving needs, and family size.
When you decide what kind of car you're interested in, you can start comparison shopping for auto insurance. InsureOnline.com can generate your auto insurance quotes in minutes! Our quick online form helps you see what coverage options are available to you. It's important to factor in insurance costs when vehicle shopping, so you stay within your budget.
3. Use a tax refund as a down payment. Putting your tax refund towards a down payment can help in multiple ways. You may reduce how much you finance, you may be able to lower your monthly payment, and you may potentially qualify for better loan terms.
A refund may even help prevent you from being "upside down" on your loan. Even a modest refund can significantly impact the total interest you pay overtime, so putting it towards a down payment may be the smartest financial decision in the long-term.
4. Boost your budget. It's tempting to see your refund as "extra money." Instead of letting it automatically increase how much you're willing to pay for the car itself, think of this refund as leverage to help you save overtime. Before shopping, review your overall budget: calculate what type of car payment fits your lifestyle, determine your auto insurance costs, and set money aside for fuel, maintenance, and registration costs. This will help you see how to best spend your refund money.
The licensed insurance agents at InsureOnline.com are happy to talk through your coverage options with you. They can help you determine what type of coverage will best fit your needs and budget, before you buy the vehicle. This way you are most prepared when you finally make your purchase. See what's available by filling in our auto insurance online form or call us at (844) 358-5605 to get started.
5. Get preapproved. Walking in pre-approved gives you a clear spending limit. By working with various lenders, you may be able to secure low-interest financing for your vehicle purchase. The purchasing process may even be faster, once you get to the dealership, if you have financing already taken care of before you begin test driving.
6. Factor auto insurance costs. A different or newer vehicle can change your auto insurance premium. Before finalizing your purchase, shop around for insurance quotes on the vehicle you're considering. If you're financing, it's important to know if there are any special coverage requirements from the lender. This will help you shop for the right type of coverage you will need.
Talking to a licensed insurance agent can help you understand what you'll need and what options are available. InsureOnline.com's licensed agents will work to help find you the best policy to meet your needs and budget. Each insurance company offers unique discounts. Get started with our licensed agents by completing our online form or calling us at (844) 358-5605 today.
Tax refunds can be more than a temporary financial boost. Using your money strategically can help set you up for success. If you plan on buying a vehicle with your refund, make sure you run the numbers, considering all the extra expenses that come with a vehicle such as auto insurance, and do your research. Think long-term and buy a car that supports your life for years to come.
About InsureOnline.com
InsureOnline.com is a digital insurance agency that provides affordable insurance to consumers who want to shop and purchase insurance online while still having the option to work with an agent if they wish. The agency offers auto, home, life, health, and commercial as well as other specialty lines of insurance. Our goal is to provide an easy, fast, convenient, and safe online shopping experience for consumers looking for the best price by utilizing all the latest and greatest technology. Based in Bedford Park, Illinois, we are licensed to write business in many states and have a multilingual staff licensed and certified in a variety of insurance lines. We partner with many highly rated insurance companies to help provide the best insurance solutions to meet your individual needs and your budget. Buy insurance online or talk to a licensed insurance agent! It's your choice.
For information and quotes on insurance coverage, please visit InsureOnline.com or call (844) 358-5605.
The general and educational information here supports the sales, marketing, or service of insurance policies. InsureOnline.com and their producers are not permitted to offer legal or tax advice. Individuals should seek advice from their own qualified and duly licensed independent tax or legal advisors based upon their own particular circumstances.