Tax, title, and license (TTL) fees are collected every time you purchase a vehicle, no matter if it's new or used. When and where you pay tax, title, and license on a car, however, depends on a few different factors.
Pay Now or Pay Later?
At CarsDirect, we recommend paying tax, title, and license fees upfront whenever possible because this saves you money in the long run.
In some cases, lenders allow you to roll these fees into your loan. This may seem like a relief since you don't need to come up with the extra cash right now, but this means you pay interest charges on these fees, ultimately costing yourself money.
When you pay TTL fees upfront at a dealership, you pay the dealer and they take care of handling these with the state. The only time you aren't able to pay these fees upfront is when you purchase a vehicle through a private seller.
Even though taxes are still required for the sale in most states, private sellers aren't legally allowed to collect them. In this case, you have to go to your local Department of Motor Vehicles or Secretary of State and pay the taxes and fees in person.
How Much Are Tax, Title, and License Fees?
Determining how much you have to pay in tax, title, and license fees depends on the state you live in:
- A car's sales tax depends on the tax rate where you live, and may be more complicated than just a state tax – it sometimes also includes city, county, and/or municipality taxes.
- A title fee is usually a one-time fee, paid when the title is transferred to you.
- Registration (license) fee collection, on the other hand, varies widely by state. Some states collect registration fees at a flat rate on an annual or bi-annual basis, while others determine them based on factors such as vehicle cost, weight, age, or fuel efficiency. Sometimes, a premium is even charged if you drive a certain type of car.
It's a good idea to know how these things work in your state before you jump into the car buying experience. You can often research this by checking with your state's government website.
Overall Cost of Car Ownership
Tax, title, and license fees are just a few of the additional things you need to keep in mind when you're purchasing and/or financing a vehicle – costs go beyond the selling price. You need to remember to budget for things like fuel, insurance, repairs, and, sometimes, parking or storage.
Without budgeting for these additional costs of car ownership upfront, you could be in trouble when it comes to affording your vehicle on a day-to-day basis. What good is a car you can't drive because you forget to budget for the cost of gas or your yearly registration?
The Bottom Line
When it comes to buying your next vehicle, don't forget to account for TTL fees, and be prepared to pay them. No matter if you pay them upfront or roll them into your loan, they're not going away!
If you've already researched the tax, title, and registration requirements for your state and are ready to begin looking for your next car loan, why not start here at CarsDirect? You can research new and used vehicles with us, and when the time comes to find a dealership, we can point you in the right direction.
Just fill out our easy, fast, and free car loan request form, and we'll get to work matching you with a local dealer that has the lending opportunities you need!