Tax Refund Auto Loan Down Payment
If your car is constantly needing repair, instead of using your tax refund to cover maintenance costs you could use that money towards a down payment on a new car. Even if you intend to use your old car as a trade-in to cover the down payment, by adding your tax refund you can get a better deal, a lower interest rate, and your monthly payments will be lower. In addition to being more friendly to your budget, the lower installment payments also make it easier for you to occasionally include additional principle payments to get the loan paidoff quickly. And there's another huge benefit... the depreciation on your car will be lower as well. Cars lose a significant amount of value the very moment you drive it off the dealership parking lot.
Typical down payments are 15-20% of the car price. Below is a handy chart to help you decide how much loan you can afford based upon your downpayment and/or trade-in value.
New or Used
Vehicle Price | 15% Down
Payment | 20% Down
Payment | | | | | | $8,000 | $1,200 | $1,600 | | $10,000 | $1,500 | $2,000 | | $15,000 | $2,250 | $3,000 | | $20,000 | $3,000 | $4,000 | | $25,000 | $3,750 | $5,000 | | $30,000 | $4,500 | $6,000 |
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