Tips for Using Your Tax Refund to Help Buy a Car


USAA Community Car Buying Tax Refund.jpg

According to the IRS, the average tax refund in 2019 is $2,873. It may be tempting to use the money as a “treat” or “bonus”, but one of the best uses of the money is to improve your current financial situation.


For example, a tax refund can provide a boost as you pay off outstanding bills, eliminate credit card debt, build your emergency fund or invest for the future.


If you’re covered on those fronts, maybe you’re considering a new vehicle? A tax refund could help make that purchase a reality. While it may not be enough to cover the full purchase price of your next vehicle, it should help you with the down payment. JJ Montanaro,  Certified Financial Planner®, recommends a down payment of 15-20% of the purchase price of the vehicle.


Car Buying Service

USAA’s Car Buying Service gives you the tools and info needed to find your next car at a discounted price. For more information, please visit the Car Buying Service Center.

If you’ve decided to buy a car with your refund, here are three steps to help you make it a smooth process:



  1. Calculate what you can afford. Don’t forget to include these costs: loan payment, insurance, fuel, maintenance. This calculator is a self-help tool used to quickly estimate the loan amount or monthly payment that fits your budget.

  2. Identify the vehicles in your budget. Use the Car Buying Service to help find vehicles within your price range- you can search for both new and used cars.

  3. Decide how much of your refund you want to put toward the new vehicle.


Will you be using your tax refund to help purchase a new car? Will it be one of the top 10 vehicles bought by USAA members? Share in the comments!


Read Next:

Smart Ways to Spend Your Tax Refund

Tax Planning for 2018 and Beyond

Best Time to Buy

Tips for Negotiating

What You Need to Know About Auto Loans  


About the Blogger: Briana Hartzell is a Navy spouse, mother to two beautiful girls (5 and 2 years), a former full time USAA employee and a graduate of Texas A&M University. Briana writes at Being Briana, a blog focused on the joys that military life and parenthood can bring.



USAA means United Services Automobile Association and its insurance, banking, investment and other companies. Banks Member FDIC. Investments provided by USAA Investment Management Company and USAA Financial Advisors, Inc., both registered broker dealers, and affiliates.

Use of the term "member" or "membership" refers to membership in USAA Membership Services and does not convey any legal or ownership rights in USAA. Restrictions apply and are subject to change.

USAA Car Buying Service provided by TrueCar, Inc. (“TrueCar”). USAA does not broker, sell or lease motor vehicles. This is an information publishing site operated by TrueCar, Inc., on behalf of USAA. TrueCar is not the seller of any of the vehicles listed. Unless otherwise noted, all vehicles shown on the USAA Car Buying Service are offered for sale by licensed motor vehicle dealers, which may not have the exact new vehicle you configured in inventory. Any changes to the new vehicle you configured, including the addition of options, accessories or services at the dealer, may change the vehicle price. Used vehicles are subject to prior sale.

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED

FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.


The information contained is provided for informational purposes only and is not intended to substitute for obtaining professional financial advice. Please thoroughly research and seek professional advice before acting on any information you may have found in this article. This article in no way attempts to provide financial advice that relates to all personal circumstances.


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