tax refund down payment

Tax Refund… Car Buying Strategy

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YOUR TAX REFUND WILL MAKE A GREAT DOWN PAYMENT! 

The extra cash to help lower your monthly car payment is on the way and for those looking to buy a car, truck, or SUV, it’s pretty good timing. 2022 looks like a promising year to make your move, also a good time to make a plan. In order to get the most mileage from your tax refund/down payment you’ll need to put a buying strategy together. First step, look at your budget realistically, particularly your monthly used car allowance.

IT STARTS WITH A LIST

Down payment amount?

Monthly payment?

Preferred term of your loan?

Insurance?

Maintenance?

It’s best to include all of your monthly expenses when developing your plan, not just for your automobile costs. Paying off debt should be considered, home maintenance, and even using your extra cash to repair your current automobile instead. You’re more likely to be happy with your next car purchase if it fits into your long term financial plan. 

 

MOVING FORWARD WITH YOUR PURCHASE

When you’re ready to move forward, a quick pit stop at “How much can I actually afford” will motivate you to drill down those numbers and negotiate a better car deal when it’s time.

When is the best time? After a seemingly endless rise in prices it looks like 2022 will bring relief, as much as 30% according to Marketwatch.com. KPMG analysts predict demand will taper and supply will increase by as early as October 2022. That means deals are coming back and you’ll want to take advantage of them. Keeping an eye on the market is also a good plan, be patient, don’t jump at the first deal you see. It’s most likely going to get better.

 

YOUR CAR AS A TRADE-IN

In addition to your “Tax Cash”, a good trade-in will increase your chances of getting the best deal. Use KBB.com to get a reasonable idea what your car is worth. The Edmunds appraisal tool is another resource for estimates on your car’s worth as a trade-in, or privately selling it on your own. If you plan to use your car as a trade-in, it’s time for some prep work.

 

PREPPIING YOUR CAR 

  • Clean the thing, inside and out. For the exterior, give it a thorough wash and a fresh coat of wax. On this inside, get rid of your personal items and vacuum out the whole thing. Don’t want to do it yourself? Have it detailed. But even though dealers have told us they can see through dirt to find a car’s actual value, making a good impression only raises your chances of a better offer.
  • Fix small issues yourself. Check all the car’s lights, including interior dome lights, and replace them if needed. Also, check all fluid levels (washer fluid, coolant, brake fluid, etc.) and ensure they’re topped off. If your car needs more serious work, leave that for the dealer. Any major issues will lower the value of the trade-in, but the dealer can perform the repairs for less than it would cost you.
  • Gather all important documents. Of course this includes the car’s title, but it should also include service records, registration and anything else a prospective buyer might want to see. Cars that have been maintained with scheduled maintenance retain more of their value. Don’t feel the need to get a vehicle history report; dealers will pull one themselves.
  • Grab any extras. Bring extra sets of keys or other accessories along with the vehicle. If the navigation system has a DVD or SD card associated with it, be sure to bring those items, as well. Dealers tell us that if these accessories are missing, they won’t give you credit for those features because they aren’t complete.

Conduct your own inspection. Note any exterior dents and dings that can’t be buffed out with a little elbow grease. Take your current car out for a test drive and pay close attention to anything that just doesn’t seem right. If there are any issues with the car, whether electrical or even a need for new tires, note them.

 

Having a hard time making your decision? Call (757) 560-4552 and ask for Mike Love. I’ll be happy to answer your questions and guide you through your decision making process. By sticking to your budget, crunching numbers, and negotiating, you’ll be purchasing a little peace of mind along with your new wheels 🙂 

Call or text (757) 560-4252 and ask for Mike Love, I have answers. 

 

 

 

 

Sources:

Ganz, Andrew “Here’s when you can look forward to used car prices finally going down

“ marketwatch.com January 10, 2022 Web. Retrieved from: https://www.marketwatch.com/story/heres-when-you-can-look-forward-to-used-car-prices-finally-going-down-11641501118 

Wong, Brian “How Should I Prep My Car for Sale to a Dealer?” cars.com May 1, 2015 Web. Retrieved from: https://www.cars.com/articles/how-should-i-prep-my-car-for-sale-to-a-dealer-1420680466320/ 

DeLorenzo, Matt “How Should I Use a Tax Refund to Buy a New Car?” kbb.com July 6, 2020 Web. Retrieved from: https://www.kbb.com/car-news/tax-time-car-buying-putting-your-refund-to-work-for-you/