What does on the road (OTR) price mean?

Seen the term ‘on the road’ price? Our guide explains what it means and what you’re actually paying for.

If you’re curious about the OTR price, OTR meaning in cars, or what the on the road price actually includes, then this guide is for you.

We’ll explain what OTR stands for, what it covers, and how it differs from the Recommended Retail Price (RRP). Plus, we’ll answer key questions to help you better understand every cost before you drive away in your new set of wheels.

What does on the road price mean?

The on the road (OTR) price includes everything you need to legally drive your new car away from the dealership – aside from car insurance, with no hidden costs or surprise fees. It goes beyond the cost of the car, covering:

• The cost of the car
• The first year’s road tax
• The first registration fee
• The estimated costs of number plates
• Delivery to the dealer
• Any retail customer saving
• VAT at 20%

In short, the OTR price bundles all essential costs, so you know exactly what you’re paying before hitting the road.

What does RRP and MRRP mean?

RRP (Recommended Retail Price) and MRRP (Manufacturer’s Recommended Retail Price) are just two ways of saying the same thing – the price the manufacturer sets for a car, including any optional extras.

However, this price only covers the vehicle itself. It doesn’t include the essential ‘on the road’ costs like registration, road tax, or delivery fees – all of which are required to legally drive the car. You may also hear terms such as ‘list price’ or ‘MSRP’ (Manufacturer’s Suggested Retail Price) – they all mean the same as RRP and MRRP.

What’s the difference between OTR price and list price?

The list price, or RRP, covers just the car (typically in standard white) and any options you select. In contrast, the OTR price gives a more complete picture. This includes the total cost to buy the car plus all the legal fees needed to drive it on UK roads.

On the road price (OTR) FAQs

Does the OTR price include VAT?

Yes, the OTR price for a new car in the UK does include VAT at the standard rate of 20%

Do you have to pay the OTR price?

It depends on the car you’re buying. With a new car, you’ll pay the full OTR price, which includes the car’s cost, registration, road tax, and other fees. However, for second hand, nearly new, or pre-registered cars, some OTR costs (such as registration and number plates) may already be factored in or excluded.

Keep in mind, when buying second hand you’ll still need to handle car tax and insurance yourself. If you buy privately, you can avoid dealer fees, but you’re less protected under the Consumer Rights Act.

How much is the OTR price?

OTR charges typically range from £500 to £2,000, depending on the car and location. This includes registration fees, road tax, delivery charges, and sometimes additional dealer fees or optional extras.

The exact OTR charges can vary based on factors like the car’s price, its location, and whether you’re buying from a dealer or privately. More luxury or higher-spec cars may have higher OTR charges, especially if there are extra costs involved, such as dealer handling or optional features.

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