How does ‘on the road’ price affect monthly payments?

We dissect the many abbreviations associated with leasing, starting with the OTR...

When you’re looking at new cars, you will probably notice the sheer number of abbreviations when looking at prices. RRP, MRRP, OTR, P11d…the list is endless.

One of the prices you should be looking out for is the list price. And, one of the questions that we get asked a lot at OSV is ‘how does on the road price affect monthly payments?’

In this article, we’re going to talk you through the different acronyms, what the list price is, and how this affects monthly payments.

What do the different prices on cars mean?

So, what does RRP, MRRP and OTR actually mean?

Well, the RRP and MRRP mean retail recommended price and manufacturers retail recommended price respectively. These are the prices set by the manufacturer of the car. This also includes any other options and VAT. However, sometimes this excludes road tax and delivery charge, so be wary of that. These are also the figures the HMRC use to work out your company car tax if you have to pay this.

Also, if you have a company car, then you will need to know the P11d value of the car. The reason you need to know the P11d value is because it’s the figure from which your company car tax bill is calculated. For more information on company car tax, read our article here.

How Does On the Road Price Affect Monthly Payments?

However, the chances of you paying the RRP are very slim. Instead, you need to think about the On the Road (OTR) price. This includes;

  • The retail recommended price
  • The delivery charge
    • This varies from manufacturer to manufacturer. It’s roughly in the few hundred pounds area.
  • The cost of fuel (sometimes it will be half a tank, other times it could be just enough to get yourself to the fuel station) half a tank of fuel
  • The car’s number plates
  • Road tax
    • This depends on the car’s CO2 emissions
    • The way in which car tax is calculated is changing as of April 2017, so we aren’t going to go into detail here.
    • Instead, head to our car tax changes article for everything you need to know.
  • The first registration fee
    • This is set by the government
  • How much discount you are getting off the vehicle

All of these amount to the On the Road price. This is how much you’ll actually be paying for the vehicle.

What is the list price?

The list price and the net price are often confused, but they are literally different names for the MRRP and the OTR price. Let me explain;

The list price is the non-discounted price, excluding any tax (VAT, Road tax, 1st registration fee etc). The manufacturer sets the list price of the car and any individual factory fitted options.

black car with 9499 price in the window

The list price is the manufacturer’s suggested retail price. It’s the price of the vehicle before any discounts you manage to score are deducted. It’s also the price before the sales taxes are added. The purpose of the list price is essentially as a reference point for any promotional offers on the vehicle. The list price should be the highest price the car should ever be.

The on the road price, however, is how much you pay after the discounts are deducted and the taxes added. The final amount you will end up paying for your car is set out in your contract. It’s all pretty straight forward, there are just a lot of different names.

How does the On the Road price affect monthly payments?

The monthly payments of your car are calculated off the price of the vehicle. So, if the monthly payments are calculated via the on the road price. Essentially, after any discount but including any taxes, VAT, road tax and first registration fee. Naturally, the lower the on the road price, the lower the monthly payments.

Where do I find the list price of a car?

You can find out the list price via the manufacturers website. We recommend you look there rather than third party websites such as comcar as we have found, on occasion, that these prices are wrong.

Brokers vs. Dealers: Which have the biggest discounts?

So, you should have a pretty good grasp of what the on the road price is. And now you want to get as much discount on your car as possible. Who does the best deal, a dealer or a broker?

All brokers and dealers offer good deals, it’s just whether that deal is right for you.

There are some brokers who have a wide network of manufactures and dealerships at their disposal. This means that they can shop around for the best deal for you. A dealership, however, can only offer you deals exclusively for that manufacturer. But, the motor industry works in quarters, and dealerships have to meet targets. Therefore, you can get some pretty great deals at the end of each quarter.

How Does On the Road Price Affect Monthly Payments?

Brokers tend to have access to the ‘fleet’ side of the dealerships. Because they order in volume, they have access to different, and usually larger, discounts. However, dealerships do not have this option. Some dealerships will only have a retail department. Some do have fleet departments but to gain access to this you will need to be buying multiple vehicles.

However, while it may seem like a good deal, it might not be the right deal for you. The best thing to do would be to have a look around, and make an informed decision. You can read our article on dealership vs. broker for more information on the two.

So, list price does affect monthly payments. However, it is the on the road price that has more of an impact on your monthly payments. Hopefully this article has cleared a few things up in terms of what all the different prices mean, and how they affect the monthly payments on your car.

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Rachel Richardson
  • 15th December 2016

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