Is the Invoice Price of a Car the Same as the Naked Car Price?
3 Answers
Naked car price = tax-exclusive price + VAT (tax-exclusive price × 17%). Besides VAT, the most important tax to pay is the purchase tax. How is the purchase tax calculated? Purchase tax = tax-exclusive price × 10% (Note: From October 1, 2015, to December 31, 2016, the purchase tax for passenger vehicles with 1.6L or smaller displacement was halved). Additional information is as follows: Naked car price: When a car is first launched, due to high attention and limited availability (manufacturers' production is also low), there are usually no discounts on the naked car price, and there might even be price markups. Over time, as 4S stores increase their promotions, the naked car price tends to decrease. Generally, larger cities with more 4S stores have more promotional activities, making the prices relatively more favorable. On-the-road price: When buying a car, it's essential to negotiate the on-the-road price with the salesperson because it includes the naked car price. Even if the naked car price has significant discounts, other fees might offset the savings. Discounts on the naked car price are often used to attract buyers or as a promotional tactic. However, when the buyer decides to purchase, the final on-the-road price might not be as cheap as expected.
Speaking of whether the invoice price of a car is the same as the ex-factory price, I used to be puzzled too. After buying two cars, I've learned my lesson: the invoice price is usually the number written on the invoice, while the ex-factory price refers to the pure price of the car. In most cases, the invoice price is the same as the ex-factory price, but dealers can play some tricks. For example, to save on taxes, they might underreport the invoice price compared to the actual amount paid. Since the purchase tax is calculated at 10% of the invoice price, a lower invoice price means paying less tax, saving you a few thousand. However, this isn't entirely good. In case of an accident, insurance compensation is based on the invoice price, so setting it too low can result in significant losses during claims. It also affects the resale value of the car, as buyers might offer lower prices seeing the low invoice price. My advice is to clarify the ex-factory price and invoice price with the salesperson before buying, and strive for an honest invoice price to avoid future issues.
As a newbie car buyer, I was confused by the invoice price and the ex-factory price when purchasing my first car. I thought the invoice price was the total cost, but when it came time to pay, insurance and miscellaneous fees were added. The salesperson explained that the invoice only lists the ex-factory price portion, and indeed, the invoice I received only showed the car price figure. However, the actual all-inclusive price was significantly higher, with purchase tax and license plate fees calculated separately. This situation made me ponder for a long time: when the invoice price equals the ex-factory price, the tax is lower; setting it lower might save on taxes, but it comes with risks. For example, insurance claims could become troublesome, and the resale value might be undervalued. Now, when I go to buy a car, I first clarify the ex-factory price and how the invoice will be issued, avoiding blindly signing contracts. Saving a bit is good, but chasing small gains might lead to significant losses.
