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What does On The Road (OTR) price mean?

Phil Hall

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Phil Hall

Empty new car showroom

If you're buying a new car, you'll probably have wondered what OTR price means?

OTR stands for Other Road Price and is one of the myriad of abbreviations that come with choosing a new car. Fear not though because we're here to explain exactly what the OTR price means and what it includes – along with such nuisances as the RRP and MRRP – keep reading as we whip the cloak of confusion off new car pricing and the abbreviations that come with it.  

Volvo showroom

What does On The Road (OTR) price mean?

On The Road (OTR) price is essentially the total cost to a buy a new car and drive it on the road legally. That means you're covered for the car's first year of registration, its new number plates, road tax, pre delivery inspection, delivery charges to the point of purchase, insurance, any finance handling fees and, more often than not, some fuel in the tank.

It can easily amount to a few hundred pounds or more depending on the car. VAT will also be factored into this price, as will any discounts that have been offered on the car. 

What does RRP and MRRP mean?

RRP stands for Recommended Retail Price and MRRP stands for Manufacturer's Recommended Retail Price – really, they're different ways of saying the same thing. Essentially, the RRP and MRRP are the prices the manufacturer expects you to pay for the car as is. 

The RRP and MRRP will include the full price of the car including any options, but won't include the price of new number plates, the registration fee, road tax or delivery charges, so it's worth factoring those in before you sign on the dotted line to buy a new car. 

What’s the difference between On The Road and List price?

List price is the price of the basic car in white including any options, but excludes the items listed above that you need to break your new car out onto the road. Basically, all the stuff the OTR price includes. 

Can I avoid paying the OTR price?

If you buy a second hand, nearly new or pre-registered car then you'll avoid some of the on-the-road costs – things like your car's registration, pre-sale inspection (although this will be factored into the price you pay) and number plates. 

That said, you will have to tax the car yourself and insure it. Buying privately avoids any of the charges associated with buying from a dealer, although you're not as well protected under the Consumer Rights Act.  

The On The Road price is the drive away price of the car, including the car's price, the cost of registration, road tax, insurance and any other costs needed to drive your new car On The Road legally.

Yes, they are. Everything is negotiable, really, but as the margins on car sales get ever tighter, it's these smaller charges – which the dealer gets cost price – that are likely to be the easiest to wipe off the price of a new car. 

It's the cost that the manufacturer charges the dealership to have your new car shipped over to its premises – it's one of the costs that is included on the On The Road price. 

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