How to turn your tax refund into your next car: Step-by-step guide

If you’ve been in the market for a new car, but have struggled to come up with a sizeable down payment, tax season may provide you with the cash you need. American taxpayers averaged around $2,800 in tax refunds in 2021, according to the IRS.1

Buying a car in 2022 is definitely more competitive than in the past, but the basic steps to car ownership are the same. Don’t know where to begin? We’ve broken down the car buying process into seven easy steps.

  1. Get your tax refund in hand – This is where the fun (and savings) starts. The IRS aims to send refunds2 within 21 days of filing.
  2. Calculate your budget – Combine the money you’ve already set aside for a down payment with your tax refund. Use our online calculator to see what your potential monthly payments will be based on your down payment, term and annual percentage rate.
  3. Consider down payment versus monthly payment – Decide whether it makes more sense to apply more money toward your down payment (which may ultimately make your monthly payments smaller) or using it to cover monthly payments.
  4. Identify potential vehicles – With car inventory low and prices high, you’ll have to decide which features are nice to have and which are necessary. Search dealer and used car websites to identify potential vehicles. New or used, economy or luxury, basic model or loaded with options – there are a lot of choices out there!
  5. Arrange financing – Work with the dealership to request Santander Consumer financing.
  6. Visit dealers – Now the fun shifts into high gear. It’s time to get behind the wheel and take some cars for a test drive. Don’t be afraid to visit multiple dealers to find the car that best fits your needs. For starters you can visit one of the 14,000 plus dealers who work with Santander Consumer.
  7. Take off in your new car – Nothing compares to the smell of a new vehicle. Congratulations, you’re done and the car is yours. Let the adventures and memory making begin!

* These statements are informational only and should not be construed as legal, accounting or professional advice, nor are they intended as a substitute for legal or professional guidance. Please consult a tax professional.

1https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-december-3-2021
2https://www.irs.gov/newsroom/tax-time-guide-use-the-wheres-my-refund-tool-or-irs2go-app-to-check-tax-refund-status

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