While many buyers only focus on the monthly payment when comparing auto financing offers, shifting your focus to the Total Cost of Ownership, or TCO, is a great way to save money in the long run. Here at the Heritage | MileOne Autogroup car dealerships, we encourage buyers to view their tax refund as a way to minimize long-term expenses rather than just a quick cash infusion. Here are some tips to reduce your total cost of ownership by using your tax refund.
Lowering the Principal Balance
The easiest way to impact your TCO is by using your refund to make a large down payment that immediately makes a dent in your principal balance. Borrowing less money upfront allows you to not only lower your monthly auto finance bill but also reduce the base amount upon which interest is calculated daily. The lower starting point also has the benefit of preventing you from being upside down on your loan, which helps you build positive equity much faster than a standard zero-down buyer.
Reducing Long-Term Interest Costs
Interest charges inflate the true cost of a vehicle far beyond its original sticker price. Putting down a large payment upfront that’s boosted by your tax refund can often qualify you for a lower tier of interest rates from the network of lenders at the Heritage | MileOne Autogroup car dealerships. Even a small reduction in your APR, combined with a smaller loan principal, results in significant savings over your loan’s lifetime, especially with a longer 60- or 72-month loan term.
Finance a New Car at a Heritage | MileOne Autogroup Dealership
With your tax refund in hand, visit one of our many car dealerships near Baltimore, MD. Our finance experts are happy to discuss a financing plan that works for you. We look forward to helping you!