When Should You Pay Tax, Title, and License Fees on a Car Loan?

Every time you buy a car, you’re required to pay tax, title, and license (TTL) fees. However, how and where you pay for TTL fees depends on your financial situation and what makes the most sense for you.

When to Pay Tax, Title, and License Fees

When Should You Pay Tax, Title, and License Fees on a Car Loan?Ideally, when you finance a vehicle at a dealership, you should pay tax, title, and license fees upfront. You save money in the long run when you do this since you don’t have to pay interest on these fees, but you want to make sure you can cover the correct amount.

In this instance, the dealer takes care of handling the TTL fees with the state. The only time you can’t pay for TTL fees upfront is if you’re buying a car from a private seller, when you have to go to your local Department of Motor Vehicles or Secretary of State in person.

If you can’t pay for the fees upfront, some lenders allow you to roll them over into the auto loan. You don’t have to worry about coming up with the money right away, but you do end up paying interest charges on them, which increases the overall cost of your loan.

Cost of Tax, Title, and License Fees

What determines the cost of TTL fees? It all comes down to the state you live in, which means there’s no universal amount.

Some cities, counties, and municipalities tax cars along with their states, while you may live somewhere with just a state sales tax. Title fees also vary by state, and are a one-time thing to transfer the title in your name. States collect registration fees annually, and base them on a flat rate or on factors such as the vehicle’s price, weight, age, or fuel efficiency.

The Bottom Line

TTL fees are just the tip of the iceberg. You also need to budget for extra costs of car ownership such as fuel and maintenance. Once you have an idea on what your budget is, and you feel ready to get the financing process started, we want to point you in the right direction.

The Car Connection works with dealerships all over the country that specialize in getting people with bad credit, no credit, or even a bankruptcy financed. You can search for vehicles with our new and used car buying guides, and when you’re ready, you can simply complete our auto loan request form, and we'll get right to work matching you with a local dealer.

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