The Financial Benefits of Buying a Used Car with Your Tax Refunds
You should not use your tax refund to buy a used car just because we are telling you to. You should not invest the entire amount as the down payment just because you really want a car. As an informed consumer living in the 21st-century, you should perform a cost-benefit analysis or explore the financial benefits of buying a used car with your tax refund money that you get from the IRS. In this post, we breakdown the advantages for you. We simplify the research and show you that buying a used car with the refund money is indeed the best option.
Investing vs buying a car
Now, the obvious route that smart people take with money that they do not need right now is to invest the same. And the safest of them all in the savings account you have at your bank where you know that you will not lose your money unless the world falls apart. Although lucrative, what pinches an average citizen is the interest rate that accompanies the savings account. It currently stands at a mere 0.05% which means keeping $1,000 for an entire year will only fetch you a nickel.
It is thus better to convert your tax refund into some form of asset. Something that you own and draw loans against in the future. This is where a used car stands as the best option. Your tax refund should be enough to act as the down payment for the vehicle. And you can finance the rest using your regular paycheck. Along with monetary benefits, a car also brings along intangible returns like productivity and time management which can indirectly lead to increased income.
Used car prices are rising
Critics will say that a used car, after all, is a depreciating asset. The monetary value of the car decreases with time. But you will not buy the used car and let it sit in the garage. You will use it daily to move around. And even though the vehicle is a depreciating asset, consider the difference of purchase and resale price as the cost you paid to use the car. That is something most of us are willing to bear.
However, 2020 has been a unique year. For the first time in history, used car prices rose as more people bought used vehicles, and the demand sky-rocketed. Experts predict that used car prices will only rise from hereon. If you buy now, expect to get a better resale down the lane and bridge the difference to take home profits. The tax refund money is ideal to buy a used car. You do not touch your savings, yet, take ownership of a vehicle.
The car you buy matter
The financial benefits only stand true if you purchase a quality used car. And that means a car with a warranty, clean title, genuine parts, and no visible damage. You can find such vehicles in Family Auto of Easley. The Buy Here Pay Here in Easley, SC dealership holds a reputation for its massive inventory, flat 2-year/36,000 miles warranty, and professionalism. Take your tax refund to Family Auto, apply for a no credit check auto loan. Easily finance your car and reap the financial benefits of your smart investment.
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