The Best 7 Cheap Cars to Buy with Your Tax Refund
With a tax refund, it can be tempting to splurge on a luxury car or a brand-new vehicle. However, for budget-conscious car buyers, there are plenty of affordable and reliable options on the market.
Updated: July 29, 2023 // Top Lists
Are you on the hunt for a budget-friendly used car that won’t break the bank? Well, you’re in luck! We’ve scoured the market to bring you the top 7 used cars under $5,000 that you can snag with your tax check. So buckle up and let’s explore these fantastic options!
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1. Toyota Camry
The 2007 Toyota Camry stands as a testament to reliability and practicality. With its comfortable interior and excellent fuel efficiency, this solid sedan is the ideal choice for your everyday commute. If you want to save even more on gas, why not consider the Hybrid models available in this price range, offering an impressive 34 mpg? Finding a gem like this may require a little extra effort, so don’t forget to conduct a thorough pre-purchase inspection or have an independent mechanic lend a hand.
2. Honda Accord
Another gem in the midsize category is the 2007 Honda Accord. Known for its longevity and efficiency, this stalwart sedan (or coupe, if that’s your style) won’t disappoint. While you may come across some higher mileage examples, fear not! A well-maintained Accord can still deliver a smooth and reliable ride. So keep your eyes peeled for the perfect Accord within your budget!
3. Toyota Corolla
Practical, efficient, and functional – the 2008 Toyota Corolla has all the qualities of the archetypal commuter car. Offering a choice of three trims, all powered by the same 126-horsepower engine, you can expect fuel economy as good as 37 mpg on the highway with the manual transmission. Opt for the LE trim, and you’ll enjoy additional features that make your journeys even more comfortable.
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4. Saturn Vue
Image Source: Conceptcarz
With unique interior features like special cutouts to carry one-gallon milk jugs on the way home from the store, the 2008 Saturn Vue may have been a bit ahead of its time. It is also available as a hybrid within the sub-$5k price range. When new, the Vue Hybrid was rated up to 32 mpg highway, making it an economical purchase in the used market.
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5. Mazda5
An unconventional choice but a smart one, especially for families, is the 2010 Mazda5. This compact minivan offers seating for six and a flexible interior with ample passenger and cargo space. With good fuel economy, the Mazda5 was a sensible choice when new and remains an excellent option for those with a $5,000 budget.
6. Honda Civic
When it comes to compact cars, the 2008 Honda Civic is a true champion. With its sporty attitude, documented reliability, and excellent resale value, the Civic is a crowd favorite. Whether you prefer the sedan or coupe body style, both promise fuel efficiency and a thrilling driving experience. Keep an eye out for a well-maintained Civic, and you’ll have yourself a winner!
7. Subaru Forester
For those seeking adventure, the 2007 Subaru Forester is an intriguing option. Known for its off-road capabilities and spacious interior for up to five passengers, this compact SUV presents a choice between two engines and transmissions. Consider the standard engine (X models) for a straightforward driving experience or go for the turbocharged model (XT Limited) if you crave extra power. Remember, the transmission you choose affects the type of all-wheel-drive system, so pick wisely!
In conclusion, finding a reliable and efficient used car under $5,000 may seem like a daunting task, but with our top 8 picks, you’re well on your way to scoring the perfect ride. Remember to be patient and do your due diligence when inspecting potential candidates.
Four Ways to use your tax refund to get a car
1. Income Tax Returns for Purchasing a Pre-Owned Vehicle
While new vehicles have their own set of benefits, for many budget car purchasers, a used automobile is a more cost-effective option. It is simple to locate a decent deal on a used car with a little bit of study. And astute automobile buyers can put their return towards the purchase of that vehicle.
2. Using a Tax Refund as a Down Payment
Our automotive financing experts recommend making a large deposit to assist you receive a vehicle loan for your next automobile purchase. Even if you decide to lease your next vehicle, having a substantial down payment will assist minimize your monthly expenses. Customers who use their refund as a down payment may be able to qualify for better auto financing options.
3. Pay Off Current Auto Loan
Using your refund to pay off an existing auto loan is a fantastic idea. Customers can use the extra cash to significantly reduce the balance on their current car loan. And they can do it by either making a few more payments or paying off the entire sum. Paying off or significantly reducing the outstanding balance will reduce the amount of interest charged over time.
4. Use Your Cash for an Auto Lease
Starting a vehicle lease with a larger down payment might significantly reduce the monthly payment. Even if the customer wants to extend the lease, most dealerships will often allow the customer to continue their current lease with a lower monthly payment on a month-to-month basis.
Alternative Finance Options
Before we get into the list, while using a tax refund to purchase a car can be a great way to secure a new ride, it’s not the only option. For those who prefer a more flexible payment plan, there are alternative finance options available, such as leasing or financing through a bank or credit union. However, it’s important to consider the long-term costs and benefits of each option before making a decision. It’s always a good idea to consult with a financial advisor or car expert to help guide you through the process and make the best choice for your individual needs and budget, especially if you have to get an auto loan with bad credit.
Disclaimer: The writers of this article may have used artificial intelligence to help them with some of the material. It should not be a replacement for professional help.