Understanding Out-The-Door (OTD) Pricing

Out-The-Door (OTD) pricing is the single most important number you need to know when buying a car. Understanding OTD pricing eliminates confusion, prevents hidden fees, and makes comparing offers straightforward.

What is Out-The-Door Pricing?

Out-The-Door (OTD) price is the total amount you'll pay to drive the vehicle off the lot, including:

Included in OTD:

• Vehicle purchase price
• Sales tax
• Registration and title fees
• Documentation fees
• Any dealer-added fees
• Destination charges (for new cars)

Not included in OTD:

• Extended warranties (optional)
• Gap insurance (optional)
• Aftermarket add-ons you choose
• Trade-in payoff (if applicable)
• Down payment or financing terms

The OTD price is what you'll actually pay, making it the only number that matters for comparison shopping.

Why OTD Pricing Matters

The Problem with Traditional Pricing

Dealers traditionally focus on:

• MSRP or "sticker price"
• Monthly payments
• Individual line items

This approach allows dealers to manipulate numbers:

Example of manipulation:

• Dealer A: $30,000 vehicle price, $3,000 in fees = $33,000 OTD
• Dealer B: $28,000 vehicle price, $5,000 in fees = $33,000 OTD

Both have the same OTD price, but Dealer A appears cheaper at first glance.

The Solution: Focus on OTD

When you request OTD pricing:

• All costs are transparent
• Easy to compare dealers
• No surprises at signing
• Eliminates negotiation games
• Saves time and stress

**Bottom line:** The dealer with the lowest OTD price gives you the best deal, regardless of how they break down the numbers.

Breaking Down OTD Components

1. Vehicle Price

The negotiated price of the car itself.

For new cars:

• Starts at MSRP (Manufacturer's Suggested Retail Price)
• Dealers may discount below MSRP
• Invoice price is what dealer pays manufacturer
• Typical discount: $500-3,000 below MSRP

For used cars:

• Starts at dealer's asking price
• Based on market value, condition, mileage
• More negotiable than new cars
• Research comparable vehicles for leverage

**Negotiation tip:** This is the most negotiable component of OTD pricing.

2. Sales Tax

Government-mandated tax on the purchase.

Key facts:

• Set by your state (typically 5-10%)
• Calculated on vehicle price (not total OTD)
• Non-negotiable
• Some states offer tax credits for trade-ins

State examples:

• California: 7.25% base (local taxes may add more)
• Texas: 6.25%
• Florida: 6%
• Oregon: 0% (no sales tax)
• Montana: 0% (no sales tax)

**Tip:** Sales tax is based on where you register the car, not where you buy it.

3. Registration and Title Fees

Government fees for registering the vehicle and transferring title.

Typical costs:

• Title transfer: $15-100
• Registration: $50-500 (varies widely by state)
• License plates: $10-50
• Emissions testing: $15-50 (if required)

Factors affecting cost:

• Your state's fee structure
• Vehicle value (some states charge percentage)
• Vehicle weight (trucks may cost more)
• Personalized plates (if chosen)

**Negotiability:** These are government fees, but dealers sometimes add processing fees on top. The processing portion may be negotiable.

4. Documentation Fee (Doc Fee)

Dealer charge for processing paperwork.

**Typical range:** $200-900 (varies by state and dealer)

State regulations:

• Some states cap doc fees
• California: $85 maximum
• New York: $175 maximum
• Florida: No cap (often $700-900)
• Texas: No cap (typically $150-300)

**Negotiability:** Sometimes negotiable, especially if excessive. Compare doc fees between dealers.

**Red flag:** Doc fees over $500 in states without caps should be questioned.

5. Dealer-Added Fees

Additional charges dealers may include.

Common dealer fees:

• Dealer preparation fee
• Destination charge (new cars, legitimate)
• Market adjustment/ADM (avoid if possible)
• Reconditioning fee (used cars)
• Electronic filing fee
• Advertising fee

Which are legitimate:

• Destination charge (new cars, set by manufacturer)
• Reasonable reconditioning (used cars, if itemized)

Which to negotiate away:

• Dealer prep (already included in their margin)
• Market adjustments (pure profit)
• Electronic filing (saves them money)
• Advertising fees (part of business costs)

**Strategy:** Challenge every dealer-added fee. Ask what service it covers and request removal.

How to Request OTD Pricing

Email Template for New Cars

Subject: OTD Price Request - [Year Make Model Trim]

"Hello,

I'm interested in purchasing a [Year Make Model Trim] with the following options: [list specific options].

Please provide your best out-the-door (OTD) price including:

• Vehicle price
• All dealer fees
• Sales tax
• Registration and title fees
• Total OTD price

I'm comparing offers from multiple dealerships and will make a decision within [timeframe].

Stock number (if applicable): [stock #]

Thank you, [Your name] [Your phone number]"

Email Template for Used Cars

Subject: OTD Price Request - [Year Make Model, Stock #]

"Hello,

I'm interested in the [Year Make Model] listed on your website (Stock #[number]).

Please provide your best out-the-door (OTD) price including:

• Vehicle price
• All dealer fees
• Sales tax
• Registration and title fees
• Total OTD price

I'm comparing offers from multiple dealerships and will make a decision within [timeframe].

Thank you, [Your name] [Your phone number]"

What to Expect

Good dealers will:

• Provide complete OTD breakdown within 24-48 hours
• Itemize all fees clearly
• Answer questions about charges
• Honor the quoted price when you visit

Red flag dealers will:

• Refuse to provide OTD pricing via email
• Give vague "come in to discuss" responses
• Provide incomplete breakdowns
• Add fees when you arrive

**Tip:** Only work with dealers who provide transparent OTD quotes upfront.

Comparing OTD Quotes

Create a Comparison Spreadsheet

Columns to include:

• Dealer name
• Vehicle price
• Doc fee
• Other dealer fees
• Sales tax
• Registration fees
• Total OTD price
• Notes (condition, options, etc.)

Example Comparison

2024 Honda Accord EX-L

Dealer A:

• Vehicle price: $32,000
• Doc fee: $299
• Dealer prep: $495
• Sales tax: $2,400
• Registration: $350
• **Total OTD: $35,544**

Dealer B:

• Vehicle price: $31,500
• Doc fee: $599
• Sales tax: $2,363
• Registration: $350
• **Total OTD: $34,812**

Dealer C:

• Vehicle price: $31,200
• Doc fee: $399
• Market adjustment: $2,000
• Sales tax: $2,490
• Registration: $350
• **Total OTD: $36,439**

Analysis:

• Dealer B has the lowest OTD despite higher doc fee
• Dealer C's market adjustment makes them most expensive
• Dealer A's "dealer prep" fee is questionable

**Winner:** Dealer B saves you $732 compared to Dealer A and $1,627 compared to Dealer C.

Using OTD Pricing to Negotiate

Strategy 1: Play Dealers Against Each Other

Once you have multiple quotes:

"I have an OTD quote of $34,812 from [Dealer B]. Can you beat that price?"

This forces dealers to compete on the only number that matters.

Strategy 2: Challenge Individual Fees

If a dealer has a good vehicle price but high fees:

"Your vehicle price is competitive, but your fees add $1,200 more than other dealers. Can you reduce or eliminate these fees to match their OTD price?"

Strategy 3: Use OTD as Your Anchor

When negotiating in person:

"I'm only concerned with the out-the-door price. What's your best OTD offer?"

This prevents dealers from playing games with individual line items.

Strategy 4: Walk Away Leverage

If a dealer won't meet your target OTD:

"I appreciate your time, but I have a better OTD offer elsewhere. If you can match $[price], I'll buy today. Otherwise, I'll go with the other dealer."

Common OTD Pricing Tricks

Trick 1: The Lowball Quote

Dealer provides unrealistically low OTD quote to get you in the door, then adds fees later.

How to avoid:

• Get quote in writing
• Verify all fees are included
• Confirm quote is valid when you arrive

Trick 2: The Missing Fees

Dealer provides "OTD" quote but excludes certain fees.

How to avoid:

• Explicitly ask: "Does this include ALL fees, taxes, and charges?"
• Request itemized breakdown
• Compare to other quotes

Trick 3: The Bait and Switch

Dealer quotes OTD on one vehicle but tries to sell you a different (more expensive) one.

How to avoid:

• Reference specific stock number
• Verify VIN matches quote
• Walk away if vehicle isn't available

Trick 4: The Finance Office Surprise

OTD quote is accurate, but finance office adds optional products.

How to avoid:

• Clarify that OTD doesn't include optional add-ons
• Decline extended warranties and extras
• Verify final paperwork matches OTD quote

OTD Pricing for Different Scenarios

Buying New

Advantages:

• Easier to compare (same vehicle across dealers)
• Destination charge is standard
• Less variation in condition

Focus on:

• Negotiating vehicle price below MSRP
• Eliminating dealer-added fees
• Comparing manufacturer incentives

Buying Used

Challenges:

• Each vehicle is unique
• Condition varies
• Harder to compare directly

Focus on:

• Market value research (KBB, Edmunds)
• Vehicle history and condition
• Negotiating based on comparable sales

Leasing

OTD for leases includes:

• First month's payment
• Acquisition fee
• Registration and title fees
• Any drive-off fees
• Sales tax on drive-off amount

**Note:** Monthly payments are separate from OTD in leasing.

Trading In

OTD calculation:

• Total OTD price
• Minus trade-in value
• Equals cash/financing needed

**Important:** Negotiate OTD and trade-in value separately to avoid confusion.

Tools to Calculate OTD

Auto Deal Hunter OTD Calculator

Our calculator helps you:

• Estimate OTD price before shopping
• Understand what you should pay
• Compare dealer quotes to fair market value
• Factor in your state's taxes and fees

Manual Calculation

Formula:

1. Start with vehicle price 2. Add sales tax (price × tax rate) 3. Add registration fees (estimate $200-500) 4. Add doc fee (check dealer or state average) 5. Add any other dealer fees 6. Total = OTD price

Example:

• Vehicle price: $30,000
• Sales tax (7%): $2,100
• Registration: $350
• Doc fee: $299
• **Total OTD: $32,749**

Red Flags in OTD Quotes

Watch out for:

• **Refusal to provide OTD** - Dealer won't give complete quote
• **"Come in to discuss"** - Avoiding transparency
• **Excessive fees** - Doc fees over $500, multiple junk fees
• **Missing information** - Incomplete breakdown
• **Too good to be true** - Unrealistically low quote (likely bait and switch)
• **Pressure tactics** - "Price only good today"
• **Vague language** - "Around $X" instead of exact figure

If you encounter these red flags, find a different dealer.

OTD Pricing Checklist

Before accepting an OTD quote:

• [ ] Received written quote via email
• [ ] All fees are itemized and explained
• [ ] Sales tax is calculated correctly
• [ ] Registration fees are reasonable
• [ ] Doc fee is acceptable for your state
• [ ] No excessive dealer-added fees
• [ ] Specific vehicle identified (stock # or VIN)
• [ ] Quote validity period is clear
• [ ] Compared to at least 2-3 other dealers
• [ ] Comfortable with the total price

The Easy Way: Let Spencer Get OTD Quotes

Requesting and comparing OTD quotes from multiple dealers takes time. Auto Deal Hunter automates the process:

• **Spencer contacts dealers** for you
• **Gets transparent OTD quotes** from multiple sources
• **Compares offers** side-by-side
• **Negotiates** for the best price
• **No pressure** - review offers at your pace

Start your OTD request today and let Spencer handle the legwork while you focus on choosing the right vehicle.

Final Thoughts

Out-The-Door pricing is the great equalizer in car buying. It cuts through dealer tactics, eliminates confusion, and makes comparison shopping straightforward.

Remember:

• Always request complete OTD pricing
• Compare OTD prices, not individual components
• Challenge excessive fees
• Get quotes in writing
• Work only with transparent dealers

With OTD pricing, you're in control of your car purchase from start to finish.