No one looks forward to tax season, but it’s well worth the time and stress when you eventually get your refund in the mail. If you’re unsure what to do with tax refund, consider using it towards your vehicle expense.
Here are just a few ways to put your tax return to work for you:
If you’ve considered purchasing a new vehicle for a while, but just didn’t have the funds available to make a suitable down payment, now could be a great time.
As you’re probably aware, the bigger your down payment, the less interest you’ll need to pay when you’re financing, and the more money you can save down the road. Depending on the size of your tax return, your down payment could end up saving you significantly in interest that you would’ve paid otherwise.
If you want to see just how much of a difference a sizable down payment can make, go online and use one of the several auto loan calculator tools available to determine how much you can save monthly.
Improve your credit score
One of the best ways to improve your credit score is to pay off debt. If you’re already in the midst of a car loan, you can use your tax return to pay off a chunk of your outstanding debt (check to see if your loan has a prepayment penalty attached to it). Not only will this help you to lower future interest payments, but it will also improve your credit score by proving you’re financially responsible.
If you’re a high-risk individual, an improved credit score will help you secure cheaper loans in the future, thus saving you a significant chunk of change in the long run. It may be tough to see your tax return go away at the snap of your fingers, but it will be well worth it at the end of the day.
If you’ve been neglecting an oil change, tire rotation, new tires, or anything of that nature, now is the time to get it done. It should go without saying, but properly maintaining your vehicle now will help to avoid any major problems down the road, saving you money long-term.
With summer upon us, it’s a smart idea to have your vehicle serviced, especially if you’re planning to take it on any road trips. Not only will it be better equipped for a long drive, but you’ll also be putting you and your family at less risk if your car is properly maintained.