AZ Registration Loans: Will They Repossess Your Car?
Think about this for a second — you’re about to buy a car, but you don’t have the cash on hand to pay for it outright. So, you take out a loan from the dealership to cover the cost of the car. You sign some papers, drive off in your new ride, and make monthly payments until the loan is paid off.
This seems straightforward enough, right? Well, there’s something called a “registration loan” that does the same thing as a regular car loan but with one major difference — the registration loan is secured by your vehicle registration.
Specifically, a registration loan is a secured loan that uses your car as collateral. What happens if you can’t make the repayments? Can they just take your car away?
What Is a Registration Loan?
If you’ve ever found yourself in a situation where you need to buy or renew your car’s registration, but don’t have enough cash on hand, then a car registration loan may be the option for you.
A car registration loan is just as it sounds — taking out an installment loan that can help you pay for your new sticker and registration, as well as some of the other fees associated with getting new tags.
This type of financing works by borrowing money from a financial institution and repaying the borrowed funds plus interest over time — usually several payments. This way, instead of having to come up with all of this money at once, you can break it into more manageable installments, making paying back the installment loan much easier.
How Does It Work?
Car registration loans are different from standard installment loans in several ways, but the biggest difference is how they are repaid. With a car registration loan, you get your new sticker immediately but make payments to the bank for several months or even years instead of making one lump sum payment after acquiring your car registration.
The amount borrowed will vary depending on the type of vehicle you’re registering and how many people are registering with you.
For example, if you’re asking for money to register two vehicles, then the bank may ask that each borrower makes monthly payments instead of just one payment for both cars together. You can also get a car loan if only one person is asking for money for car registration for a single vehicle. Be careful in 2022-2023 because repo rates are climbing.
The time frame of your loan also depends on how much you’re borrowing and what kind of interest rate you qualify for, but in most cases, it is a short-term loan that can be paid off within six months or so.
When your payments are finished, the bank will send you a check with all the money you’ve repaid plus interest. This way, when you get your new tags after repaying this installment loan, not only do you have financing already set up ahead of time for when you need it, but now you’ll know exactly how much your loan costs and if it’s worth paying back in the future.
What Documents Do I Need for a Registration Loan?
When applying for a car registration loan, you’ll need to provide several documents to the bank or finance company.
First, you’ll need a valid driver’s license. Second, though it may sound obvious, you’ll also need proof of insurance for both vehicles that are registered in your name. If one isn’t currently under your name, but you’re registering it with the loan, then be sure to bring proof of ownership as well.
Lastly, if someone is co-signing on this installment loan with you (meaning the other person is equally responsible for making payments), then they will also need their valid driver’s license and proof of insurance — either under their name or yours.
Benefits of an Auto Registration Loan
1. Quick and Easy To Apply
A car registration loan is a great way to get the financing you need for your new sticker and tags without having to wait until next year’s tax season rolls around again.
This is helpful if you have a high-performance vehicle that doesn’t qualify for conventional financing or if you just don’t want to spend months waiting until you have enough money saved up for it — especially when time is of the essence!
2. No Long Term Commitments
With an auto registration loan, there are no long-term commitments. You repay this installment loan over a short period — usually about six months or less — and then all payments are finished.
If you need more money at any point after your initial car registration loan, you can ask for another one, but you won’t be stuck in a long-term commitment like with most types of car loans.
3. Paid in Installment
This loan is also very helpful for people who aren’t sure how much they’ll need to borrow initially because it can be paid back in parts over time.
For example, you may only need $400 to get your new registration and tags at first, but if you’re not positive, then just take out the full $500 with this installment loan so that you always have enough money set aside when the next renewal comes around.
That way, you don’t have to worry about rushing to come up with another $100 or so when your last payment is due!
4. Monthly Fixed Payments
Even if you’re financially responsible with your monthly bills, sometimes life happens, and an extra expense pops up that you weren’t expecting. This loan is perfect for people who want to be prepared in case they need more money for car registration but are unsure of when the next payment will be due.
5. Can Be Repaid Online
As mentioned before, your bank or finance company will send a check directly to you after all payments have been completed and each installment has been paid off.
This makes arranging for other types of transportation while your loan is still being repaid very easy because you have a direct deposit form from the company to prove you paid your loan in full.
This will give you the peace of mind that not only can you afford to drive around town, but also that it’ll be very easy for anyone checking your registration status to see that all payments have been made and your car is fully registered!
Can They Repossess My Car if I Fail To Pay the Monthly Payments?
No, your bank or financing company cannot repossess your car. This loan is specifically designed for people who cannot get their money in time because it’s direct-deposited and mailed directly to you! If they’re sending the check and money order directly to you, then this means they won’t cut off your car in any way when payments aren’t made on time.
If you do miss or are late on a payment, they will probably charge you some sort of fee for the inconvenience. It’s still better than having your car being repossessed, so always make sure to pay whatever monthly fees are charged because it is much easier to deal with fees than have their repo man coming after you!
How To Apply for a Registration Loan and Submit Documents Online
One of the great things about auto registration loans is that you don’t have to wait in a long line at your bank or finance company to complete an application. You can do all the paperwork, sign the contract, and submit everything to our registration loans online!
This reduces your time spent waiting in line at a physical location until it’s finished, making this loan very convenient because the transaction only takes a few minutes to complete.
Your documents will need to be scanned (or faxed) into their office after they’ve been signed electronically. Once this has been completed, then your loan will be processed within 24 hours and automatically mailed out with payment details included right away. It’s that simple! If you’re trying to get new car tags or stickers quickly, there’s no better way to go.
When Is the Best Time To Apply for a Vehicle Registration Loan?
The best time to apply for a car registration loan is when you’re about to pay your taxes. This way, you can get the additional $100 or so that you would normally be putting towards vehicle tags and put it into an auto registration loan instead.
That way, once October hits, and all of your hard work has paid off, then your car will already be fully registered with no lingering bills!
If you want to make sure you’ve got enough money set aside for future registrations while waiting on your check from the bank or finance company, then we recommend applying for this loan during late summer/early fall.
You won’t need all of it at first (most people don’t), but if something pops up mid-winter like a broken elbow and you can’t work, then you’ll be so happy that you’ve got some type of emergency fund set aside.
Registration loans can be a great way to get the car you need without worrying about making a large down payment. By filling out our simple online form, you can get pre-approved for a loan and have the funds you need to buy the car of your dreams.
We work with various lenders who are committed to providing borrowers with competitive rates and terms, so you can be sure to find a loan that fits your needs. Have any questions? Our team is here to help.
Contact us today and let us show you how easy it is to get behind the wheel of your dream car!