What do the manufacturer's suggested retail price and the on-the-road price mean when buying a car?
3 Answers
Here is the introduction to the manufacturer's suggested retail price and the on-the-road price when buying a car: 1. On-the-road price: The on-the-road price refers to the total cost required to purchase a car. On-the-road price = ex-factory price + purchase tax (generally ex-factory price x 8.55%) + car insurance cost + vehicle and vessel usage tax (approximately 400 RMB, a tax levied since 2007) + inspection and license plate fee. Simplified, it is ex-factory price + ex-factory price x 8.55% + 4200. 2. Manufacturer's suggested retail price: The current vehicle sales model involves many steps. Generally, cars are sold through 4S stores or agents rather than directly from the manufacturer to consumers. However, the manufacturer provides a suggested retail price for the car, which is derived from a comprehensive analysis of the car's cost, positioning, etc. This is the manufacturer's suggested retail price often seen, which is the price announced by the manufacturer when a new car is launched.
The manufacturer's suggested retail price (MSRP) is like the sticker price set by car manufacturers, indicating the approximate base cost of the vehicle itself. However, the out-the-door (OTD) price is what truly matters—it's the total amount you'll actually pay to drive the car home. Let me give you a real example: the last car I bought had an MSRP of 150,000 yuan, which looked appealing, but the OTD price ballooned to over 170,000 yuan. Why such a big gap? The OTD price includes the purchase tax (calculated as 10% of the vehicle price), mandatory traffic insurance and commercial insurance (costing at least several thousand yuan for the first year), registration fees (ranging from hundreds to a thousand yuan), and most critically, hidden charges like dealer-added service fees or accessory packages. My advice: don’t be fooled by the MSRP. Insist that the salesperson provide a detailed OTD price breakdown before buying, compare quotes from multiple dealerships, and you’ll avoid overspending. Also, base your budget on the OTD price, not just the surface number, to prevent financial strain.
From a budget management perspective, the manufacturer's suggested retail price (MSRP) is just the baseline, while the on-the-road price represents the true cost. It encompasses all mandatory expenses: purchase tax (typically around 10% of the car price), varying vehicle and vessel tax by region (though never negligible), compulsory traffic insurance (starting at 950 RMB), commercial insurance (potentially thousands depending on coverage), registration fees (~500 RMB), and possible additional service charges. My advice: first note down the vehicle's MSRP, then use a mobile app to calculate total expenditure—initially estimate by adding roughly 15%-20%. During actual transactions, pay attention to details—opting for smaller engine displacement vehicles with lower tax rates, or negotiating to remove unnecessary items like PDI inspection fees can effectively reduce the total price. Prepare cash or loan plans in advance to prevent the on-the-road price from exceeding your budget. The key is to clarify the purpose of every fee—never trust verbal promises blindly, always review written contracts, as this is how you smartly manage your wallet.
