What Does the On-the-Road Price of a Car Include?
2 Answers
On-the-road price of a car refers to the sum of the ex-factory price, purchase tax, insurance, vehicle and vessel tax, license plate fees, and other costs. The on-the-road price of a car includes: 1. Vehicle purchase tax: This is a tax levied on units and individuals purchasing specified vehicles within the country, determined by the ex-factory price and displacement of the vehicle model. The latest vehicle purchase tax rate is 10%. 2. Motor vehicle insurance: Also known as car insurance, it is a type of commercial insurance that covers compensation for personal injury or property damage caused by natural disasters or accidents involving motor vehicles. 3. Vehicle and vessel tax: This is a behavior tax levied on vehicles traveling on public roads and vessels navigating domestic rivers, lakes, or seaports, calculated based on their type, tonnage, and prescribed tax rates. 4. License plate fee: After completing insurance and tax payments for a new car, you can take these documents to the vehicle management office to register, which is also known as obtaining a license plate.
The total out-the-door price of a car is the sum of all the money you actually pay when driving it out of the 4S dealership, including the base price of the car itself, which is the bare vehicle price. Then there's the vehicle purchase tax, a mandatory tax set by the government, calculated as a percentage of the car's price, with slight variations in rates depending on the region. Insurance is also unavoidable, with both compulsory and commercial insurance required, the cost of which depends on the car model and coverage amount. The license plate fee is paid to the DMV for registration, and standards vary by location, with higher costs in first-tier cities. The service fee or handling charge covers various miscellaneous items the 4S dealership helps with, and sometimes these can be negotiated down. I remember one time when I forgot to ask about the license plate fee when buying a car and ended up spending a few hundred extra. It's advisable for beginners to have the salesperson list all the details during negotiations, not just focusing on the bare vehicle price, and to budget in advance to avoid overspending. You can also save money, for example, by buying insurance yourself for more discounts.
