Tax season can be a second Christmas for most adults. However, it can be hard to decide whether you should save your money or spend it on something you need (or don’t need).
Of course, if you have the money to spend and need a new car, then you have your answer. Not convinced just yet? Read below to learn more about why tax season is also one of the best times to buy a used car.
Why Buy a Car During Tax Season?Car buying during tax season isn’t just a good idea because you’ll have extra money burning a hole in your pocket — although that does help. More importantly, though, car dealers like to take advantage of the new tax year for their own reasons. Let’s jump into all the reasons why you should buy a car during tax season:
There are tax season incentives and sales specials
Tax season sales and incentives are big during this time of the year.
This is because both car dealers and manufacturers alike are preparing for an influx of car buying. It’s also because car dealerships have their own sales schedules, and they’re pretty predictable too, considering they track spending during tax season.
For example, they know that roughly 25% of Americans wait until the last two weeks of tax season to file their returns. They use this information to plan special sales to give customers a reason to spend their tax returns on a new car. That’s why you’ll see incentives crop up starting in April and reaching an all-time high around Memorial Day weekend — making it one of the best times to get that new make and model you’ve been eyeing.
You’ll have more vehicle choices
Most car dealers buy new inventory in October as new models are released at the end of the summer. While the goal is to sell all the new stuff, not all of the recent inventory will be in high demand — which means they may end up with a surplus of new inventory.
At the same time, those looking to buy new models certainly aren’t buying used ones. This also means that there’ll be plenty of used cars for the taking as well.
The lowest interest rates happen during tax season
Interest rates are always an uphill battle when it comes to financing a new car — except during tax season.
As part of the special sales and incentives that take place during this time, you’ll find that interest rates are up to two percent lower compared to the rest of the year.
This benefits everyone looking to buy a new car, especially those who may not have the best credit history or scores.
Other Things to Consider:
Car buying is always at its peak during tax season. However, you don’t want your focus to be solely on getting a brand new model or the incentive that looks best.
In other words, you don’t want to go overboard, which is why you need to remember the following before making an actual purchase decision:
- Consider trade-in offers. You’ll likely be able to get even more bang for your tax return buck by taking advantage of a certified pre-owned vehicle compared to a brand new one. Bonus points if you have a car to trade in.
- Stay within your budget. There’s more to the price of a new or used car than just the sticker price. You’ll also need to factor in the down payment, sales tax, the drive-off price, and all of the other odds and ends like registration, insurance, etc. Create a budget before shopping and stick to it so you don’t buy more car than you can actually afford.
- Use your refund for the down payment. The bigger the down payment you can make on a new car, the better. If you’re already financially primed to buy a new car during tax season before you even get your refund, consider bulking up your down payment by adding your refund to it. Or, put your refund towards your first few months of car payments to alleviate any stress.
Lastly, if you do buy a car during tax season due to the ongoing promotions, don’t forget to read the fine print. It’s always better to be safe than sorry, especially if it’ll affect your car payments or warranty down the road.
When you’re ready to do some car buying during tax season or any other time of the year, the industry experts at Motobyo are here to help. We provide buyers with the essential tools they need to make the best car buying decisions — without the fine print.