COLUMBIA, Mo. –A tax refund can rev up your budget for a different set of wheels. But go slowly and drive the best bargain possible when car shopping, says Andrew Zumwalt, University of Missouri Extension financial planning specialist.

Don’t hit the gas too soon by spending your money mentally before you receive it, Zumwalt said. If there’s a mistake in your return, you might not be getting the refund you expected. “It’s a good idea to wait until you actually get the money,” he says.

Once the refund has arrived, Zumwalt recommends having a plan before you set foot onto the showroom floor. That plan should include setting aside part of the refund for use later in the year or for emergencies.

First, decide if you should buy a car or if alternative transportation is acceptable. Second, think about what type of vehicle you want, and third, decide how to buy it. Fourth, consider finances. Fifth, consider other costs such as maintenance and insurance.

Vehicle ownership allows the owner access to a wider range of jobs, stores and housing. Still, mass transit, walking, bicycling, taxis and other alternatives might be options, depending on your situation. Ask yourself if the convenience of car ownership is a priority, Zumwalt said.

Decide what to buy before you shop. Choose three or four options and price each of them before you shop. If you set your sights on only one type of vehicle, you’re likely to pay more, so keep your options open, he said.

Before visiting a dealership, decide if you prefer a new or used vehicle. If you buy a used car, have a trusted mechanic check it before signing on the dotted line.

Consider the age and condition of the car, mileage, maintenance and insurance costs, and availability of service. Too often, buyers don’t factor in these costs when purchasing a car, and they can quickly overextend your transportation budget.

Before you get to the negotiation stage, compare prices on vehicles, Zumwalt says. This means shopping online before visiting dealerships.

Don’t let salesmen trap you into answering, “What are you willing to pay?” Ask them what they are willing to offer and don’t be afraid to walk away.  Know what the “drive-off-the-lot price” is. 

Also, shop around for financing. In many cases, your dealer can provide financing, but check with banks and credit unions to compare loan rates and terms. It’s also wise to get preapproval and check your credit rating before shopping, as your credit rating not only influences the terms of your loan, but also the cost of insurance.

Careful driving can help reduce transportation costs. Avoid fast braking and acceleration to conserve fuel, he says. “You can save money with a properly maintained vehicle,” he says. Routine oil changes and other maintenance can save you money in the long term.

Zumwalt oversees MU Extension’s Volunteer Income Tax Assistance (VITA) program. Eligible participants can have their taxes prepared and filed free through this IRS-certified program. Returns are filed electronically and refunds come quickly, he said. Volunteers also provide financial education.

Information on the VITA program and other financial planning programs offered through MU are available at

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