TTL, it’s not some new texting phrase. It stands for tax, title and license fees, and it’s something you need to be familiar with if you’re buying a vehicle. These include the sales tax on your vehicle, your license or registration fees, and the cost of titling the vehicle in your name.
Tax, title and license fees will vary by state, and can mean a big difference between the selling price and out-the-door cost of a car. In some cases these fees can be rolled into your auto financing, but it’s always a good idea to plan on paying them upfront, especially if you have bad credit.
Paying Out of Pocket
Paying the TTL charges up front will not only save money over the life of your loan, it may improve your approval chances as well. Depending on your credit situation, you may even be required to pay these fees up front. People with good credit—generally a credit score of 700 or above—may be able to roll the fees into their auto loan. However, doing this will increase the amount of interest charges paid over the loan term. On the other hand, for buyers with bad credit, doing this typically isn’t an option.
The cost of these fees can depend on many things. Where you live is the biggest factor because sales tax and title fees vary by state. Registration (license) fees are also calculated differently in each state. Some charge a flat rate every year, or every few years, while others base your license fees on vehicle weight, value and/or age. When you purchase a car from a dealership, they take care of filing your title and registration, but you are charged for this service with a documentation (“doc”) fee. This fee can vary by state and dealer, although most states limit what dealers can charge.
Planning Ahead for Fees
Expecting to pay additional fees on top of a vehicle's selling price is a best practice, but with so many variables, how can you budget for these costs ahead of time? A good tip is to look online to determine your state's tax rate and registration costs. This will give you a rough estimate for what to expect. CarMax has an estimator tool that can be helpful in determining a ballpark figure for what you might expect to pay.
If you don’t want to cover all these costs directly out of pocket, having a trade-in may help you cover the majority of your TTL fees if there is enough equity in your vehicle.
The Bottom Line
There can be many additional costs associated with purchasing a vehicle. Avoid being caught off guard by knowing what to expect before you buy. If you have bad credit, there may be even more factors involved. The first step is finding a dealer that can work with your credit situation.
This is where Auto Credit Express comes in. We work with a nationwide network of dealers who have lenders available to work with people in various stages of bad credit. Let us point you toward a dealer in your area by filling out our free auto loan request form today!