Out The Door Price

The out-the-door (OTD) price refers to the total amount you’ll pay to purchase a car, including the vehicle price and any taxes, governmental fees, or dealer add-ons.

Here is one example of what happens when you ask a dealer for an “Out the Door” Price:

StepActionExplanation1Customer Inquiry”Could I have the out-the-door price for this vehicle, please?”2Dealer ResponseThe dealer provides a breakdown of all costs involved in the purchase.3Out-the-Door Price BreakdownExample Details		Vehicle Price$25,000		Documentation Fee$670 (Covers paperwork and vehicle registration costs)		Title and Registration Fees$225 (Mandatory for new title assignment and vehicle registration)		Sales Tax (6%)$1,500 (Applied to the sales price minus any trade-in value)		Destination Charge$1,500 (For transporting the vehicle to the dealer)		Dealer Preparation FeeIncluded in the advertised price		Total Out-the-Door Price$28,895 (This is the final price the customer needs to pay to purchase the vehicle, including all taxes and fees)

Knowing your out-the-door price and what you’ll end up paying for the car isn’t just smart; it’s actually key to getting a better deal and avoiding hidden costs.

I’ll explain below…

Relevant Articles To Read:

• How Much Are Dealer Fees and How to Avoid Them
• How To Negotiate Used Car Price
• How Much Do Dealers Markup Used Cars
• How Much Will Dealers Come Down on a Used Car?
• How Much Do Dealerships Make on New Cars
• What to Bring When Buying a Car – The Essential Checklist

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What Exactly is Included in the Out-the-Door Price?

The out-the-door price includes:

• Vehicle price (MSRP for new cars or market value for used cars)
• Destination charges
• Taxes (sales tax, excise tax)
• Title fees
• Registration fees
• Documentation fees
• Any dealer add-ons like extended warranties or fabric protection

So, in essence, the out-the-door price encompasses every charge associated with buying the car and driving it off the lot.

Another OTD Price Example:

For example, if you purchased a new 2019 Toyota Camry with an MSRP of $25,000, your out-the-door price might look like:

• MSRP: $25,000
• Destination Charge: $955
• Sales Tax: $1,900 (at 7.6%)
• Title Fee: $50
• Registration Fee: $145
• Documentation Fee: $399
• Extended Warranty: $1,200
• Total Out-the-Door Price = $29,649

As you can see, the OTD price ends up $4,649 higher than just the MSRP due to the extra taxes and fees. This demonstrates why it’s so important to determine the full OTD price upfront.

List of Out the Door Price Calculators to Use:

• Car Edge OTD Price Calculator
• Edmunds 5 year actual cost calculator
• “Buy My Car” Cost Calculator
• Calculator Online OTD
• Car And Driver Out The Door Calculator
• Engineerin Calculator
• Market Watch Calculator

How Out-the-Door Price Compares to MSRP

The manufacturer’s suggested retail price (MSRP) is set by the vehicle manufacturer to represent the “recommended” sales price.

But it does not include any additional taxes, governmental fees, or costs associated with finalizing the vehicle purchase.

That’s what makes the MSRP very different from the out-the-door price you actually end up paying at the dealership.

In fact, depending on the taxes and fees in your state, the out-the-door price could be 10-15% higher on average compared to the MSRP.

Using our Camry example above, the OTD price was over 18% more than the sticker price MSRP.

So when you see advertisements showing low prices or deals on new cars, remember – that cheaper MSRP usually won’t match what you pay out-the-door.

Why Focus on the Full Out-the-Door Price?

Negotiating based on the out-the-door price instead of just the monthly payment or vehicle price alone has some key benefits:

• Simplicity – Allows you to focus negotiations on one total price number rather than multiple itemized charges
• Transparency – Reveals total costs and all add-ons upfront without hidden surprise fees later
• Budgeting – Helps accurately set spending cap based on what you can afford overall
• Cost Control – Prevents increased total loan amount over time from dealers extending lower monthly payment terms

Essentially, the out-the-door price cuts through all the complexities of the buying process and gives you a simple, transparent view of the bottom line – what amount comes out of your bank account. This allows you to negotiate and budget intelligently, avoiding that binds you to expensive loan payments over time.

When Not to Request the Out-the-Door Price

While negotiating the out-the-door price is advisable in most cases, some situations exist where you may want to avoid asking for it upfront:

1. Dealers Guarding Negotiation Leverage

Some dealers prefer to withhold the full out-the-door price breakdown until the buyer comes into the dealership. They want the opportunity to make their sales pitch and build rapport before price negotiations. Requesting detailed OTD quotes early can put them on the defensive.

2. Lack of Transparent Price Shopping

Having the complete out-the-door figures makes it very easy for buyers to price shop quotes across multiple dealers. This transparency means dealers have to aggressively compete on every component of the price quote. Some dealers avoid this dynamic by deflecting initial OTD pricing questions.

3. Hiding Profit Opportunities

Additional dealer fees and expensive financing add-ons are big contributors to profit. Disclosing the OTD price exposes these costs upfront rather than allowing them to be tacked on later in the process. This may incentivize some dealers to hold off showing all-in pricing.

4. Screening Serious Buyers

Providing researched, tailored, out-the-door quotes takes time for dealers. Some use an initial OTD price request to screen buyers just kicking tires rather than serious purchasers worth investing quotes for.

5. Pushing Monthly Payments

Without understanding the complete out-the-door figures, buyers can be manipulated by low monthly payments that mask higher overall loan costs. Some dealers leverage this tactic to divert focus from the OTD price.

In essence, buyers request out-the-door prices to gain negotiation leverage – which is why some dealers push back on providing it early. But for serious buyers, persisting to get the complete OTD breakdown is crucial.

Strategies to Negotiate a Lower Out-the-Door Price

Here are some key strategies you can leverage to negotiate down the out-the-door price when buying a car:

Compare Quotes From Several Dealers

• Get OTD quotes from 3-4 local dealerships on the same make/model vehicle
• Use these multiple quotes as leverage for dealers to compete and lower OTD prices
• Any dealer fees should be uniform, so quotes make comparing apples-to-apples easy

Wait Out High-Demand Times

• In peak seasons or low inventory, dealers won’t budge much on price
• Be prepared to walk away and try again when demand drops in future months
• Avoid limited edition vehicles entirely if you want bargaining power

Say No to Dealer Add-Ons

• Reject expensive add-ons like extended warranties or prep packages
• Only opt-in if these add real value for you personally
• Negotiate things like pinstriping or door guards as freebies instead

The only constant in the out-the-door price equation is the sales tax. But the combined impact of just a 10% reduction in vehicle price and nixing those dealer add-ons can save you over $2,500+.

So focus on negotiating down the key parts of the out-the-door price – that’s where big savings happen.

Estimate Your Own Out-the-Door Budget

When determining what to spend on a car, it’s important to use the out-the-door price as your budget. That means taking into account taxes and fees – not just setting a cap based on the vehicle price tag alone.

You can use an online OTD price calculator to estimate your total cost and see sticker shock. Input things like:

• Vehicle price
• Zip code
• Estimated sales tax
• Average fees for your state

The calculator will show your estimated out-the-door price. Armed with this information, you can determine what total budget works for your finances.

Then when negotiating, focus on getting quotes below your maximum budget amount. And remember to say the magic words:

“What will my out-the-door price be?”

Key Takeaways on Out-the-Door Price

• Out-the-door (OTD) price encompasses the entire amount paid for a vehicle including all taxes and fees
• OTD is typically 10-15% higher than just MSRP/sticker price
• Getting quotes with itemized OTD costs allows you to compare pricing across dealers
• Say no to expensive dealer add-ons to reduce your bottom line
• Focus negotiations on lowering OTD price based on maximum budget

Knowing your out-the-door budget and asking for OTD quotes puts the leverage back on your side. You reduce the chance of overpaying and avoid financing more than planned.

Sources For This Article

• https://www.reddit.com/r/askcarsales/comments/114avbp/looking_to_buy_a_new_car_can_someone_explain_the/
• https://www.capitalone.com/cars/learn/getting-a-good-deal/outthedoor-price-everything-you-need-to-know/1566
• https://www.quora.com/Is-it-realistic-to-ask-car-dealerships-the-out-the-door-price-through-the-phone-before-seeing-it
• https://www.reddit.com/r/askcarsales/comments/119mhnx/how_do_i_get_the_out_the_door_price_without/
• https://www.reddit.com/r/askcarsales/comments/napwa4/dealers_not_wanting_to_give_otd_out_the_door/?rdt=40276
• https://www.stromtrooper.com/threads/is-it-strange-that-dealer-is-reluctant-to-provide-bill-of-sale.73145/