GOBankingRates Study Shows Why You Might Want to Spend Your Tax Refund on a New Car A new study from leading personal finance website GOBankingRates shows car buyers how to turn their tax refund into a down payment on a new car while auto loan interest rates are low
LOS ANGELES, March 12, 2014 /PRNewswire/ -- This tax season presents the perfect storm of conditions for tax refund recipients who are looking to purchase a car, according to a new report from GOBankingRates.
GOBankingRates' investigation of tax refunds and car buying highlights three key factors that make the 2014 tax season a prime time to purchase a new car:
- 25% percent of Americans plan to buy a car with their tax refunds.1
- The average tax refund is a sizable $3,034.2
- Interest rates for auto loans are near historic lows. 3
"The average tax refund is equivalent to a 20 percent down payment on a $15,000 auto loan; combined with today's very low interest rates, it is a great time to buy a car," said GOBankingRates managing editor, Casey Bond. "In fact, qualified car buyers can expect to find a three-year loan around just 3%. Three years ago, you'd pay double."
To provide benchmarks for comparison, GOBankingRates looked at how auto loan rates measure up in each state in the U.S., as well as the 50 most populated cities.
- Cities with the best auto loan rates are Detroit, Mich. (2.67%), Long Beach, Calif. (2.71%), and Oakland, Calif. (2.72%).
- Average rates in highly-populated cities include New York City (2.81%), Los Angeles (2.96%), Houston (3.05%) and Philadelphia (3.44%).
This study surveyed base auto loan rates for three-, four- and five-year terms from banks and credit unions located in the United States as of March 3, 2014. Data was compiled from the GOBankingRates interest rate database, which in partnership with Informa Research Services Inc., aggregates interest rates from more than 6,000 financial institutions.
Sources: 1 eBay Motors (April 2013); 2 IRS "2014 Refunds Ahead of Last Year" (March 6, 2014); 3 GOBankingRates
GOBankingRates is a personal finance website that connects consumers with the best interest rates nationwide. Its editors have been featured on several top media outlets, including U.S. News & World Report, Yahoo! Finance, Forbes, The Street, Huffington Post and more.
To find the best auto loans in your neighborhood, please visit http://www.gobankingrates.com/auto-loans/.