In car buying, the price on the window sticker is not the price a buyer pays before walking out the door. All purchases will include additional costs that come in the form of tax, title, and license (TTL) fees.
What They Are
These fees include sales tax, license and registration fees, and the cost of titling the vehicle in the buyer’s name. States set their own rates for sales tax and title fees, but registration fees vary by how a state charges for them. Some states charge based on value and/or age of a vehicle, some charge by vehicle weight, while others charge a flat rate, but not necessarily every year.
How to Pay Them
It’s better to pay TTL fees upfront, especially if the borrower has damaged credit. A consumer with a good credit score – 700 or above – may be able to roll these fees into their loan, but doing so will leave them paying more in interest charges over the term of the loan.
TTL fees can be paid out-of-pocket, but if a buyer is trading in a vehicle with enough equity, this may help cover the majority (or all) of the cost.
Most dealers will typically file the paperwork for the title and registration for the borrower, but this service comes at an additional cost known as a documentation or “doc” fee. The fees vary both by dealer and state, but most states cap how much a dealer can charge. Not having the dealer take care of these will mean a trip to the DMV or secretary of state’s office.
Knowing What to Expect
With so many variables, it can be tricky to budget for these costs. Using online tools can be a big help in determining your state’s tax rate and registration costs, as well as estimating what you might expect to pay in overall TTL fees.
Find the Right Financing
Don’t be caught off guard by additional fees when purchasing a vehicle. Taking steps ahead of time can put you in a prime spot to avoid surprises and get the right deal for you. If you have bad credit and are in need of your next vehicle, let Drivers Lane start you out on the right path.
We work with a nationwide network of special finance dealers who have the lending specialists available to work with people who have credit challenges. Begin today by filling out our free, no-obligation auto loan request form.