How To Use Your Tax Refund to Buy or Lease a Vehicle

March 24th, 2021 by

Ever since you started working, you’ve expected the federal government to take some portion of your income every year as a tax. What’s less sure is that you’ll get any money back. So it’s always a welcome surprise when you open your mailbox and find a refund waiting.

You can use this windfall to get the car you’ve always wanted. But before you head down to Puklich Chevrolet to check out our wide variety of new and pre-owned cars, crossovers, SUVs, and trucks, find out in advance some of the ways you can use your tax refund to buy or lease a vehicle.

Having It All

The best possible way for you to spend your tax refund if it has five figures is to pay in full for your purchase. You and our dealership benefit by avoiding the time and effort it takes to check your credit and create a financing plan. It also clears our inventory space right away and you gain more leverage in bargaining. If this is something you want to do, call our Sales Department before you come down. We can then arrange to have you in and out as quickly as possible.

Financing Your Buy

If your tax refund is around $3,000, which is average according to the IRS, then you’re more likely to use it as a down payment. That initial amount makes it slightly easier for you to get approved because lenders like that have a stake in the financing. It also lowers your monthly payment and total expense because your loan is smaller.

Estimating Payments

You can estimate your monthly payments using our convenient Payment Calculator online. For example, assume you want a car loan for $30,000 at an Annual Percentage Rate of 4.0 percent for 60 months:

  • With no money down, your monthly payment runs $552.
  • Put down $3,000 and your installment drops to $497 a month. This represents total savings over the life of the loan of $3,300 in interest, which is more than the $3,000 you put down.

Applying for Pre-Approval

You can save some time by getting pre-approved for an auto loan before you pay a visit to our dealership in Bismarck, ND. You’ll then know what you can afford and can narrow your search to cars that meet your price range. There’s no cost or obligation, you’ll get your credit score., and see how you rank against the rest of the country. Our process does not count as a hard inquiry, so it won’t affect your credit score.

Simply fill out our online application form and we’ll get back to you as soon as possible. If you have questions, click the Chatbox to speak with a member of the finance team, or you can also contact us by phone.

Getting a Lease

If you think of a lease as borrowing a vehicle rather than owning it, you’ll understand why it may be a cheaper option for you. The monthly payments are lower because you’re paying to use the car rather than for the entire cost of it. Leases can run from 12 to 60 months with average lengths of 24 to 36 months. At the end of the lease, you can walk away without the hassle of selling, sign up for a new lease on a new model, or buy the vehicle.

While you can put money down on a lease to reduce monthly payments, it’s not always required. But you can use your tax refund to make the initial payment or drive-off cost, which covers the following:

  • First month’s payment.
  • Acquisition Fee, which is set by the lender for offering the lease.
  • Document Fee for processing your documents.
  • Security Deposit, which is refunded at the end of your lease
  • Title, tag, registration, and license fees are charged by the state and city.

Paying Off What You Owe

If you still owe money on your current vehicle, you can pay off all or part of your auto loan. If your financial obligation is finished, you now have a car that you can sell or trade-in to help with financing a new purchase or lease.