Very few people look forward to tax time each year. In fact, most people avoid it until the very last minute. That is, unless you know you’re due a tax refund in which case you’re probably filing the necessary paperwork as soon as you can. A big tax refund is a great resource for a car down payment, if buying a car is on the horizon. Around tax time, many dealers will work directly with you considering the amount of tax refund you have headed your way. Some dealerships even have tax preparers on hand who will file your taxes for you if you use the refund at the dealership.
If this is a scenario you’re preparing for this spring, do a little bit of homework beforehand to ensure all of your ducks are in a row. If you don’t already know what kind of car you’re interested in buying, check out practically any make and model you can think of at Cars.com. You can read about engine performance, user reviews, interior features and safety functions. You can also see what the dealership price on the vehicle is likely to be which gives you a better idea of what car options you can afford.
The site also offers a handy payment calculator which will provide a very close estimate to what your monthly payment on the car will be. In this calculator, you can enter the price of the car you’re interested in, the amount of your tax return down payment, the interest rate that you might expect on your loan and the tax rate in your area. The system will take all of these numbers and generate an estimated monthly payment which is usually very conservative meaning your actual payment after purchase might be less than the calculator generates. The more money you put down on a vehicle purchase, the less your monthly payments will be which is why using your annual tax return in this manner makes so much sense.