If you are one of the lucky Americans who is getting a tax refund this year, you already may have that money pegged for a special purpose. If you were thinking about using your tax refund to buy a car, you might want to rethink that -- at least in the short term. Research from Black Book, a used-car valuation guide, has looked at the historical data and found that used car prices are higher in the spring and decline in the summer, making it smart for consumers to hold off on using their tax refunds to buy a car for at least a few months.
In assessing five popular car segments, Black Book found that the average prices for used cars in all of them declined between April and July. For last year, it noted the following price drops during that time period:
- Entry-level, midsize car: 5.9 percent.
- Full-size car: 4.2 percent.
- Full-size crossover: 3.6 percent.
- Upper mid-size car: 3.5 percent.
- Compact car: 3.4 percent.
Even if you opt to hold off on buying a used car for a few months, now is a great time to start your research to ensure you are happy with your choice and get a good price. Read 10 tips for buying the right car in 2014 to help you get started.
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.