The Cost of Car Buying: More Than Just Your Loan Amount

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - April 13, 2018

When a borrower budgets for a car purchase, there are some extra fees that aren’t typically included in the price of the vehicle. It’s important to be aware of these extra costs and be prepared to pay them, either by including them in the loan or paying them out of pocket.

The Fees to Watch For

The selling price of a car doesn’t include tax, title, or license fees. Sales tax, vehicle titling fees, and registration fees can all vary by state. Registration fees can also fluctuate by the age, value, or weight of the vehicle, or they can be a flat rate. Not all states charge the same flat rates or require them to be paid every year.

Borrowers need to prepare for documentation fees, as well. This is the fee charged by the dealership for preparing and filing any sales- and loan-related paperwork, as well as filing registration and title documents with the state. Like most fees, the rate dealers can charge varies by state, and most states limit the amount a dealership can charge. But even with cost caps, a borrower can still see a documentation fee of anywhere from $200 to $400, or more.

Paying Out of Pocket

Fees are something a borrower should plan to pay for up front, especially if they’re dealing with bad credit. In some cases, documentation, tax, title, and registration fees can be rolled into a loan, but this is more common for borrowers with credit scores above 700. Rolling these fees in means a higher loan principal, and that means a borrower ends up paying more in interest charges over their loan term.

If a borrower can’t roll these fees into their loan, they’ll have to pay them out of pocket. In situations where a borrower has trade-in equity, this can be used to cover the costs.

Other Fees and Payments to Consider

Other things to consider when budgeting for a car include a down payment (which is required for bad credit car buyers), insurance, fuel, maintenance, and repair costs. All of these things, with the exception of a down payment, are over and above the sticker price of a car. This is why it’s important to consider all the costs of vehicle ownership before selecting a car. Financing a car that may not be affordable in the long run could lead to loan default, and possibly repossession.

Financing with the Right Lender

If you need a vehicle but don’t know where to turn, CarsDirect is here to help. We can point you toward a local special finance dealership that has lending resources available to help, even if you’re struggling with credit issues. Just be sure you’re ready to take on all the costs associated with vehicle ownership.

When you’re ready to find financing, just fill out our auto loan request form and we’ll work to match you with a dealer from our nationwide network. Our online form is quick, easy, and free of cost and obligation, so what are you waiting for? Begin the journey toward your next car today!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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