What does full payment out-the-door price mean?
2 Answers
The out-the-door price when buying a car = vehicle price + vehicle purchase tax + insurance premium [commercial insurance + compulsory traffic insurance] + vehicle and vessel usage tax + vehicle inspection and license plate registration fee. Vehicle price: The price quoted by the 4S store is the vehicle price. Vehicle purchase tax: Vehicle purchase tax = ex-factory price ÷ (1 + 17%) × 10%. Insurance premium: Insurance premium = commercial insurance + compulsory traffic insurance (prices differ for family passenger vehicles with below 6 seats and 6 seats or above). Vehicle and vessel usage tax: Tax amounts vary for models with 1.0L-1.6L displacement, 1.6L-2.0L displacement, and 2.0L-2.5L displacement. Vehicle inspection and license plate registration fee: Refers to the cost required for self-inspection or 4S store agency service.
The term "full payment on the road" is quite common in the automotive industry. Over the years, I've helped many friends purchase cars, and it refers to paying all car-related expenses in one go, including the vehicle price, purchase tax, insurance, license plate fees, and handling charges. It's essentially the total cost bundled together so you can drive the car home directly. The advantage is that you don't have to bear the burden of a loan, avoiding interest and hassle. The downside is that you need sufficient cash on hand. I often advise first-time buyers to calculate the detailed costs upfront, estimating an additional 10-15% of the vehicle price as the total expense. If funds are adequate, opting for full payment is the most cost-effective choice, preventing future loan repayments from eating into your budget. But don’t forget to factor in car insurance to avoid any oversights. This one-time payment suits those who prefer a simpler lifestyle, especially small families or young professionals with substantial savings, as it eliminates monthly installments and allows for an earlier upgrade to the next car.
