Where Will Your next vehicle take you?

Tax season is a very popular time for consumers to purchase their next vehicle. The average tax refund is roughly $3000 according to the IRS. That’s a nice chunk of cash. So what’s the best way to spend it? Instead of blowing this money on extravagance, why not use it to get ahead? If you need a new vehicle this could be a great time to make that purchase.

Spend your refund wisely by carefully considering these options:

  • Use the money as a down payment on a new or used car.
  • Pay down and existing car loan.
  • Refinance your current loan.
  • Fix or upgrade your current car.

 

Use the money as a down payment on a new or used car
A substantial down payment is one of the most important factors in securing an auto loan or lease. Particularly for shoppers with poor credit, using a tax return as a down payment can create [...]

Sales Tax is another expenditure to be aware of when purchasing a vehicle. The State of Arkansas outlines it’s tax information below.

Sales tax, registration and title fees: The state sales and use tax rate is 6.5%, 7% for Texarkana residents, of the taxable price of motor vehicles, trailers and semi-trailers with a gross purchase price of $4000.00 or greater. Tax is computed on the total delivery price including rebate, freight charges and extra equipment. Federal Excise Tax is not included. Extended warranties are taxable whether or not the vehicle is taxable.

So the total purchase price, after trade-in (if applicable) is multiplied by 6.5%. Just like for a down payment, let’s use a vehicle cost of $12,000.

Without a trade in, your sales tax on a $12,000 vehicle would be $780.00. This does not cover any of the other local fees or taxes assessed when you get your plate.

Assistance with sales tax is [...]