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4 Ways To Use Your Tax Return on a Car

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An envelope full of cash next to a car gear-shift knob
Here are just a few ways that you can use your tax return on your current car…or a new one
Photo: The News Wheel

While there are countless ways to allocate tax return funds, why not spend it on a car? Whether you already own a vehicle or are currently shopping for a newer one, here are four ways to use your tax refund check on a car.

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Pay down a car loan

One of the best ways to use a tax refund is to lower the balance you still owe on a current car loan, as Edmunds’ Ronald Montoya recommends. This will help you pay off the loan faster so you can enjoy putting your name on the vehicle’s title sooner — and basking in the freedom that comes from having no monthly car payment.

Invest in new parts

Spring is a great time to treat your vehicle to some new parts or some much-needed service, advises Montoya. New tires, wheels, and brake pads are three purposeful items to use your tax refund on. And a major tune-up is a great way to optimize your vehicle’s efficiency and prepare it for upcoming road trips.

Customize with accessories

Weathertech rubber Floorliners in a car footwell
All-weather floor mats are a sensible accessory that will help preserve your vehicle’s interior from the elements
Photo: The News Wheel

You can also put your tax refund toward rejuvenating your car with some fresh accessories, suggests Montoya. Update the cabin with seat covers and all-weather floor mats. Splurge on a backseat entertainment system to keep young ones quieter on road trips. Or upgrade to the waterproof speakers and subwoofer system to take your camping trips and tailgating parties to new heights.

Make a down payment on a new car

If it’s time to say goodbye to your old car, you could put your tax return toward the down payment of a new car. Per Montoya, it’s a great way to curb the cost of a new vehicle so you can bring home the model you’ve been daydreaming about.

Check out this article for inspiration when shopping for car accessories. And here are some tips to help you save up for a down payment if your tax refund doesn’t stretch that far and you need to wait a bit before bringing home a new car.

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