Cars Blog

Finance Blogs » Cars Blog » Buying a car with a tax refund

Buying a car with a tax refund

By Tara Baukus Mello ·
Monday, March 24, 2014
Posted: 5 pm ET

About 71 percent of Americans are expecting a tax refund this year and many are planning to use their refund checks to buy a car, according to a new survey by CarMax, the largest retailer of used cars in the U.S.

CarMax's survey found that among those Americans expecting a refund, 17 percent overall are expecting to use the money to buy a car. Adults under age 35 who are expecting refunds were the largest group with car-buying plans at 29 percent. That was followed closely by parents at 26 percent. It's interesting that parents expecting a refund were twice as likely -- 23 percent -- to say that they'd used their refund check toward a big purchase like a house or a car versus adults without children at just 11 percent.

Geographically, the CarMax survey found that Americans living in the South were most likely to put their tax refund toward buying a car at 22 percent.

The majority of respondents expecting a refund -- 44 percent -- said that they will use the tax refund to pay off debt, which could include paying down or paying off a car loan.

Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.