What you need to know about the price at the door

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When it comes to buying a car – new or used – you’re likely to be bombarded with a variety of different acronyms and terms. The one you will encounter is the door price, usually abbreviated as OTD price, which differs from the list price. This is the total cost you will pay, including fees and sales tax.

Knowing this and other termsyou are likely to walk away with successful negotiations and the best possible offer.

What is the price at the door?

Door price is the term that describes the total cost of the vehicle. That’s really what it says – it’s made up of the price you’ll pay when you walk through the dealership door with your new set of keys.

Knowing this number is essential to ensure you get the best deal when negotiating, especially because you may be able to get some of the costs removed. It’s also important to ask for this number before signing for your new vehicle, as the purchase price is usually higher than the original number you saw.

However, your door price may also be affected by your reprise and deposit. When negotiating the total cost of the vehicle, ask that the trade-in and down payment not be factored into the amount you pay. This way you can see how much your vehicle will cost you finance before depositing money.

What does the door price cover?

This price covers a range of costs that go into your new set of wheels, including:

  • Vehicle price
  • Documentation fees
  • Vehicle title and registration
  • Sales tax
  • Registration fees
  • Concession fees
  • Dealer extras like gap insurance or extended warranty

Price at the door compared to MSRP

The main price you will see when buying a car is the MSRP. This is usually the number on the vehicle’s window – the sticker price – when you walk into a dealership’s lot. The MSRP, or Manufacturer’s Suggested Retail Price, is the price recommended by the vehicle’s manufacturer. Although dealers don’t always follow this price exactly, it serves as a starting point for negotiation.

But this number is much lower than the price at the door. Do not be distracted by the announced number. Instead, ask the dealership for the total price you’ll have to pay – the door price. It’s also important to trade based on that number, not the MSRP. The price difference will have a huge impact on your monthly cost, so figure out how much you can afford with a car loan calculator.

Negotiate the door price, not the monthly payment

Dealerships want you to conceptualize your car as a monthly payment. Avoid this. If you shop around for pre-approvalyou need to know how much you can afford to pay and what you can expect with your monthly payment.

Ultimately, the monthly payment can be manipulated by the dealer by extend the term of the loan or add extras. Whether you opt for dealer financing or a loan from a bank, the focus should be on the total you pay at the end of the loan. The payment is simply the amount you budget for each month.

The bottom line

Save money at the dealership comes down to preparation. Remember that the number you pay at the exit – the door price – tends to be higher than the MSRP, so don’t be distracted by the first advertised price. It’s also a good idea to get pre-approved for a loan and research different financing options before signing.

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