Whether you are buying a new or used vehicle, you will need to pay tax, title and license (TTL) fees. The exact amount required for these fees will vary significantly based on which state you live in and the cost of the car you wish to purchase. While some buyers choose to roll TTL fees into their auto loans, it is normally advantageous to cover them up front.
The Cost of Tax, Title and License Fees
Before buying a car, you should research TTL fees for your particular state. Several websites offer handy calculators, and the one featured on CarMax's site is exceptionally helpful because it allows you to select your state and vehicle price range from a dropdown menu. Here are a few examples based on CarMax estimates.
All totals are based on a vehicle purchase that totals $12,251 to $15,000, and registration fees have also been included.
- Sales Tax: 5.75%
- Title: $15
- Registration: $13.75 to $47.75
- License Plate Transfer: $4.50
- Total: $737.68 to $929.75
State: North Carolina
- Sales Tax: 3%
- Title: $40
- Registration: $28 to $59.75
- License Plate Transfer: $15
- Total: $450.53 to $564.75
- Sales Tax: 8.9%
- Title: $26
- Registration: $50
- License Plate Transfer: $10
- Total: $1,175 to $1,425
Depending on where you live, tax, title and registration fees can add up to a significant amount of money. Why shouldn't you just roll these fees over into the total amount of your auto loan and worry about them later? There are a few compelling reasons to consider.
Paying Tax, Title and License Fees Up Front
The importance of paying your tax, title and license fees up front has a lot to do with the current state of your credit. If you have a "good" to "excellent" credit score (above 700), you may be able to finance these charges, but you may not want to. On the other hand, if you have "bad" to "very bad" credit (a credit score below 620), it may actually be necessary for you to pay TTL fees out of pocket.
- Good Credit: If you are buying a car with good credit, you will probably be allowed to roll all of your fees into one neat bundle and finance the total. This is because you will be considered a "low risk" borrower. A lender may have no issue permitting you to take out a loan that exceeds the cost of the vehicle, but you will probably save a little money by paying the fees separately. You will be paying interest on any charge that is financed. And even though you may be getting a prime interest rate, you could still spend money unnecessarily (if you don't get 0% financing) by adding TTL fees to your loan.
- Bad Credit: If you need to purchase a vehicle with moderately to severely damaged credit, you will be categorized as a "high risk" borrower. And because a potential lender will be looking to minimize the loan risk, they may not be willing to extend a loan that is greater than the car's total price. Also, because of this risk factor, you will probably have to accept a higher-than-average interest rate on your auto loan. So, you will definitely save money by not adding TTL fees to the amount you are financing. By being able to provide tax, title and license fees up front, you will both improve your loan approval chances and save money over the life of your loan. If you are unsure about where you currently stand with your credit, click here for information about how to obtain your credit score.
Buying a car with less than perfect credit can be challenging. However, if you are able to save up enough cash to at least cover TTL fees, you will give yourself a definite advantage. To make the purchasing process even easier, you can put aside a little more in order to put up a down payment. This way, you will be asking a lender to finance an amount that is actually less than the cost of the vehicle and you will build some equity in your vehicle.
Bad Credit Car Loans
The best way to ensure your success as a car buyer with credit issues is to get the right team of experts on your side. Auto Credit Express can help you get the financing you need to buy an affordable, reliable vehicle. Regardless of what your credit looks like, we can connect you with a dealer in your area who is qualified to work with your unique situation. Our service is free, and our goal is to get you into a car quickly.
Just fill out our fast and 100% secure online application to get started today.