What is the Difference Between the Ex-factory Price and the On-the-road Price of a New Car?
3 Answers
The difference between the ex-factory price and the on-the-road price of a new car is: 1. Definition: The ex-factory price refers to the price of the car alone, while the on-the-road price includes (the ex-factory price, car insurance, and taxes). You can also understand the on-the-road price as the total cost of your purchased vehicle plus purchase tax, insurance, registration, and other fees, which is the price you pay to drive the car on the road. 2. Ex-factory price: The price set by the 4S store based on the manufacturer's suggested retail price (MSRP) and market conditions. 3. On-the-road price: The total cost required for the vehicle to be legally driven on the road. The on-the-road price is the final transaction price, meaning that once you have completed all the legal procedures and can drive the car on the road, the sum of all the costs associated with the vehicle is the on-the-road price.
I experienced this confusion when buying a new car. The ex-factory price refers to the base price of the vehicle itself, which is usually the discounted price advertised—it looks very cheap, but it's just the starting point. The on-road price is the total amount you actually pay out of pocket, including the ex-factory price plus various additional fees, such as purchase tax (a mandatory tax for new cars, usually around 10% of the car's price), compulsory insurance (traffic insurance is required, and commercial insurance is optional), license plate fee (administrative charges from the DMV), financial service fee (if you take a loan), and some dealer add-ons (like window tinting or a rearview camera). These extras can significantly increase the total cost. I think the most important thing is not to be fooled by the ex-factory price—you must always calculate the on-road price to budget properly. I remember once seeing a car with an ex-factory price of 150,000 yuan and excitedly going to pay, only to find the on-road price was nearly 180,000 yuan—I almost didn’t bring enough money. That experience taught me to always ask the salesperson for a detailed breakdown in advance to avoid surprises. Also, taxes and insurance standards vary by city, so you need to be extra careful when comparing prices for online car purchases.
From a cost-saving perspective, there's a significant difference between the ex-factory price and the on-road price. The ex-factory price refers to the pure vehicle cost, which salespeople often use to lure you into the dealership. The on-road price, however, is the total sum of all expenses: vehicle price, purchase tax, insurance, license plate fees, and potential additional handling charges. This means the on-road price is considerably higher than the ex-factory price. For example, a car with a 100,000 yuan ex-factory price might cost over 120,000 yuan on the road. When budgeting, I realized this difference affects loan amounts. If you only budget for the ex-factory price, overspending becomes likely. I recommend using online calculators before car shopping to estimate the approximate on-road price, then compare models accordingly. Additionally, while purchase tax is fixed, you can save on insurance by opting for basic coverage, and handling license plate registration yourself can cut costs. Knowing the on-road price strengthens your bargaining position and helps avoid hidden dealer fees. Last year, I saved nearly 5,000 yuan on my car upgrade using this method—it felt like winning a lottery. Remembering this distinction can sharpen your financial planning; don't let the allure of a low ex-factory price trigger impulsive decisions.
