After you’ve worked all year, it is nice to know that some of the money that was deducted is coming back to you. According to the IRS, the average tax refund is estimated to be between $3,000 and $3,500.
Here is how your tax refund can help with your Ford purchase
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Your tax refund can act as your down payment
This is the most straightforward way your tax refund helps with the purchase of a Ford. Whether you are purchasing a new Ford or a used Ford for getting around the greater Macon or Covington area, it is a smart decision to put some money down on the car to help lower your monthly payment. If you are in the position of having to purchase a new car and you weren’t planning on it, using that tax refund can be a huge help.
2. Pay down your Ford loan or lease quicker with your tax refund
Let’s say you have a $3,000 tax return. And you’ve saved an additional $2,000 to put down on your car purchase.
Use the example of financing $25,000 over 60 months at an interest rate of 3% APR.
By putting down $5,000 you are financing $20k, not $25k. This would mean your monthly payment is about $90/ month less than with no down payment, and results in a savings amount nearly $400 over the life of the loan. If you already have an auto loan, you can also make additional payments using your tax return!
3. Using the tax refund may help you get a loan
Creditors like to see a small amount of down payment. This is especially important if your credit is not the best. It may help you get approved for a loan if you have the down payment to show credit worthiness.
4. You can use your tax refund for repairs on your Ford too
While the bulk of this article discusses putting money towards a car payment, let’s not forget repairs. Perhaps you need work on your transmission but have been putting it off. You can use the money from your tax refund to do this.
5. Prevent negative equity
You have negative equity when the amount you owe on the car exceeds its current worth. Paying more into your loan helps you stay above water. Why is it important to avoid negative equity? In the event of an accident where your car is totaled, the insurance company will compensate you according to the car's value rather than the amount you owe. You will then have to pay the remaining amount out of pocket while looking for a new vehicle. In such a case, having paid more into your loan, the depreciation is far less than it would be had you only been making minimum monthly payments.
We're Always here to help you at Buter Ford in Milledgeville near Macon
It's not always as easy to navigate the car-buying process. Along the way, there are a lot of financial factors and other decisions to be made. Don’t hesitate to contact us to help with financing or to take a test drive of a new F-150 or used Explorer, or other Ford vehicle you have your eye on.