Admit it: You love your car. Maybe you even have a pet name for it. Since it’s carried you many miles, now it’s time to show how much you care.
So instead of blowing your tax refund on a down payment for a new car — like the ads invite you to do — lavish a little love on your existing car. Or pay off your loan, and then old faithful will be all yours.
Spending your tax refund wisely could give you these benefits:
- Improve the safety, appearance and performance of your car.
- Leave money for investments, savings or travel.
- Make you feel smart ‘cause you did the right thing.
The IRS estimates the average refund for Americans is between two and three grand. Here’s how to stretch those dollars and keep — insert pet name for car — rolling.
1. Tech upgrade
Rather than buy a new car with cool tech gadgets, add them yourself — for less. Here are just a few of the goodies you can buy with your refund:
- Bluetooth stereo: Connect your smart phone to your car’s stereo.
- Rear camera: Don’t run over your bike.
- Heads-up display: See driving directions and other data reflected on your windshield.
And don’t even get us started on all the stuff you can buy to impress your friends, such as the Pimp My Ride travel coffee mug.
2. New shoes
Buying new tires for your car might save money on gas and will definitely give you the grip to help avoid accidents. If your tires fail the penny test or are down to the “wear bars,” which are indicators built into the tires to show when there is less than 2/32-inch of tread, buy a new set of tires. Save money by shopping online and have the tires shipped to a local installer.
3. New mats
What’s the first thing you see when you open your car door? Disgusting, stained, curling floor mats. Not only are these potentially dangerous — unanchored floor mats can pin the accelerator pedal — but they create a dingy appearance that actually lowers your self-esteem (we theorize, anyway). Pop for OEM floor mats from your dealer or shop on eBayMotors.
4. Used-car makeover
Here’s a trifecta of appearance upgrades:
- Detailing works miracles: Get a good detail job from your local car wash, and you’ll think you just bought a new car. For bonus points, ask them to steam-clean the seats.
- Fix that ding: You’d be amazed at what a mobile paintless dent repair service can do for a couple of hundred bucks. These guys are like sculptors.
- Eye surgery: No, not your eyes, the car’s. What we’re talking about here is those cloudy headlights. Ask at your car wash or detailer for a good local headlight guy. It’s like having cataracts removed. You’ll wonder why you didn’t do it sooner.
5. A recharge
Buy a new battery. Not exciting? Picture yourself walking home at 2 a.m. Are you listening now? If your battery is older than three years, buy a new one proactively. You can read the date code on the battery to see if you’re living on borrowed time. Or call the AAA mobile service. They can test the battery and replace it if need be.
6. High-yield investment
Instead of investing your tax refund, pay down or pay off your loan. If your interest rate is high, the net effect will be more money in your pocket than many investments. And, unlike with the market, this deal is guaranteed. Speak with your lender to find the best way to apply the money, either as an extra payment or two, or to pay down your balance.
7. A really cheap used car
Buy a car for three grand? Are you kidding? Actually, if you know where to look, you’d be amazed at what you can buy within the $2,000-to-$3,000 range. Buy a bargain car by knowing where to shop, how to use the search filters and what to look for.
Philip Reed is a staff writer at NerdWallet, a personal finance website. Email: [email protected].