What you can expect from financing a car during tax season

March 17th, 2022 by

During tax season, many dealerships experience a rise in how many clients they can help. Because of this rise, there are several benefits you can experience from dealerships and tax season itself. With careful planning and knowledge of what you want, you can maximize the benefits you have when you want to get a new vehicle.

Using Your Tax Refund as a Down Payment

Some bills next to tax forms

Taxes” licensed under CC BY 2.0 via Flickr by free pictures of money

When you file a tax return for the current year, you may receive a large sum of money in return. With this money, you can make a down payment on a new or used vehicle. Doing this can help you get the initial payment on your vehicle and start your normal monthly car payments. While some people predict the amount of money on their tax return and use it for upcoming known expenses, many consider it extra money added to their paychecks. With some planning, you can maximize your tax return and other finances to prepare for the down payment.

When you prepare to make a down payment, you can expect to pay at least 20% of a vehicle’s cost before you can fill out paperwork and drive away with your new car. For example, if a car costs $20,000, then 20% of the cost would be $4,000. You can use your tax return and other methods of decreasing the cost, such as making a trade-in, to start the payment. If you have enough leftover money from your return, you may also pay the first few months of your car payment with the money you get back from the government.

Using Your Tax Refund for Leasing

While you can certainly use your tax refund to make a down payment on a vehicle, you can also use it to lease a vehicle. Unlike financing a new or certified pre-owned car, leasing a vehicle is like renting a home. When you lease a vehicle, you make monthly payments for driving a vehicle during a specific time period. This time can vary, but most often this means you drive the vehicle for three or four years before returning it to the lot. When you return the vehicle, you can either buy it for a lower cost or walk away.

Unlike financing, when you lease a vehicle, you can often only choose new vehicles. Using your tax refund during the tax season to make some of your payments on a new vehicle can help you save some money. Like financing a vehicle, you can plan to use your tax return and other payment methods to make sure you have enough money for the payments. Leasing a vehicle also has other benefits, such as having lower monthly car payments, and a lower down payment to drive away from the lot with the vehicle, especially if you take advantage of special offers.

Incentives and Specials

Because of the influx of customers during tax season, there is a rise in the number of incentives and specials you can use to maximize your benefits. This includes minimizing costs and getting the best value possible for your new or certified pre-owned vehicle. Researching incentives and specials can help you find the exact deal you want, and help you discuss your options with representatives. Incentives are often reasons to purchase a specific vehicle, such as a discount on that type of car, or an upgrade to a higher trim level for the same cost as a lower one.

While incentives might be about a specific model or even a specific car on a lot, specials might apply to all the cars at a lot or a specific brand. Specials can discount the cost of vehicles during a period, offer shorter payment agreements, or even create a way for you to pay off a vehicle before you drive away with it. 

Larger Dealership Inventories

During the tax season, many locations recognize that more customers will visit and increase the number of vehicles they keep on their lots. For you, this means you’ll often find more kinds of vehicles, and have plenty of options to choose from. Cars, trucks, and SUVs are the most common, and searching for a vehicle that meets all your needs becomes easier because of the large lot sizes. It’s important to remember other people might be interested in the same vehicle, so preparing your finances ahead of time can make sure you get what you want.

Using Your Tax Refund to Pay Off a Current Car

While it may not be the most glamorous option for your tax refund, the tax season can help you pay off a car you currently own. This means you use the money you get from your tax return to get ahead on your current payments. This can help you pay off your current vehicle faster. Once you pay off your current vehicle, you can consider getting a new car without having to fear the extra money it may take to pay for both vehicles each month.

Pay Cash for Your New Car

Finally, you can cash out your tax refund and pay the entirety of a new car’s cost. When you prepare to do this, it’s important to remember that cars are often several thousand dollars, so making sure you have enough money to pay the entire cost of the vehicle and any other payments can help you get through the process faster. Paying the entire cost of a vehicle can help you save money because you’re not paying the interest rate for a car loan or leasing option.

Are You Looking for a Car This Tax Season?

At North Coast Mitsubishi of Akron, we can help you get the vehicle you want. We offer our Brittain Road location as a place where you can find services such as auto parts and accessories, trade-ins, and financial options to help you get your next vehicle. We offer an inventory of pre-owned vehicles and you can choose specials to help you pay for your new car. A team of our financial experts can help you through our finance application, maximize the value you get from our lot, and minimize the time and money you spend here.


Posted in Car Financing