What Do the Ex-Factory Price and On-Road Price of a Car Refer to?
2 Answers
Car ex-factory price and on-road price are defined as follows: the ex-factory price refers to the price of the car itself, excluding any other fees; while the on-road price is the total cost required to legally drive the car on the road after purchase. Generally, the on-road price equals the ex-factory price plus insurance, purchase tax, license plate fees, etc. If there is a mortgage loan, a mortgage handling fee is also required. Below are detailed introductions to the related fees: 1. Purchase Tax: Vehicle purchase tax is a tax levied on units and individuals purchasing specified vehicles within the country. It is determined by the ex-factory price and displacement of the vehicle. Currently, the vehicle purchase tax is levied at a rate of 10%. 2. Commercial Insurance: Apart from the compulsory traffic insurance, other insurances can be optionally purchased by the car owner. The insurance price is closely related to the new car price. It is recommended to purchase vehicle damage insurance, third-party liability insurance, passenger liability insurance, and no-deductible insurance, among others. 3. Vehicle and Vessel Tax: This is a behavioral tax levied on vehicles traveling on public roads and vessels navigating domestic rivers, lakes, or territorial ports, calculated based on their type, tonnage, and specified tax rates. 4. License Plate Fee: After completing the insurance and tax procedures for a new car, the owner can take these documents to the vehicle management office to register the car, i.e., to get the license plate. After obtaining the vehicle license and registration certificate, the car fully belongs to the owner.
I remember being completely confused by all these terms when I first visited a car dealership. The ex-factory price refers to the basic price of the vehicle alone, without any additional costs—it's the number you see in advertisements. The on-the-road price is more comprehensive, covering all the final expenses you'll pay, such as purchase tax, insurance, vehicle and vessel tax, license plate fees, and registration fees. When I bought a compact car back then, the ex-factory price seemed just over 100,000 yuan, but the on-the-road price suddenly jumped to more than 120,000 yuan, nearly blowing my budget. So before buying a car, always ask for a detailed breakdown of costs. Dealers love to play tricks, adding extra parts or service fees that can really sting. Don’t just look at the ex-factory price—calculate your entire budget.
