What Does On-the-Road Price Mean?
2 Answers
On-the-road price refers to the total cost of purchasing a car and all the necessary legal procedures to drive it on the road (if it's a loan, the interest is calculated separately). The on-the-road price of a car is the sum of the purchase price, vehicle purchase tax, insurance, license plate fees, and other expenses. Below are the relevant details: 1. Calculation method: The calculation method for the new vehicle purchase tax is: (naked car price ÷ 1.17) × 10% (the current vehicle purchase tax rate is 10%). Note: The taxable price for taxpayers purchasing self-use taxable vehicles does not include value-added tax (VAT) (starting from May 1, 2018, the VAT rate for manufacturing, automobiles, and other industries was reduced from 17% to 16%, and the VAT rate for transportation, construction, basic telecommunications services, and agricultural products was reduced from 11% to 10%). 2. VAT: Since the purchase price in the special invoice for motor vehicle sales includes VAT, when calculating the vehicle purchase tax, the 17% VAT must first be deducted, i.e., the taxable price for vehicle purchase tax = invoice price ÷ 1.17, and then the vehicle purchase tax is calculated at a 10% rate.
The on-the-road price is what we in car sales commonly refer to as the all-inclusive price. It not only includes the sticker price of the car but also covers all additional expenses such as purchase tax, insurance, license plate fees, and registration fees. For example, if you have your eye on a new car with a sticker price of 150,000 yuan, the on-the-road price might be around 180,000 yuan. This is because the purchase tax is typically 10% of the car's price, insurance costs several thousand yuan annually, and license plate fees vary by a few hundred yuan. This helps buyers see the total cost at a glance and avoid any surprise expenses when signing the contract. I always remind customers to budget for this amount and not just be tempted by the low prices advertised by manufacturers. Many first-time car buyers overlook the calculation of purchase tax, leading to insufficient funds. It's advisable to clarify the details of the on-the-road price with the salesperson early in the car-buying process to ensure smooth financial arrangements.
