What do the manufacturer's suggested retail price and the on-the-road price mean when buying a car?
2 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.
