When shopping for a new vehicle, the number you see on the window sticker (the MSRP) is rarely the amount you will actually pay. The "Out-the-Door" (OTD) price is the final bottom-line figure that includes all taxes, government fees, and dealer charges. Using a new car calculator helps you avoid "sticker shock" when you sit down in the finance office.
Key Components of the Calculation
MSRP & Options: This is the base price of the vehicle plus any physical additions like roof racks, upgraded rims, or interior protection packages added by the dealer.
Sales Tax: In most states, sales tax is calculated on the net price. Many states allow you to subtract your trade-in value from the purchase price before applying tax, which can save you hundreds of dollars.
Documentation Fees: Also known as "Doc Fees," these are charged by the dealer for processing the paperwork. Some states cap these fees, while others do not.
Registration and Title: These are mandatory government fees to register the vehicle in your name and issue a legal title.
Rebates: Manufacturer incentives are usually applied after tax has been calculated on the full price of the vehicle.
Example Calculation
Imagine you are looking at a SUV with an MSRP of $40,000. You have a trade-in worth $10,000 and the dealer charges $500 in doc fees. If your state tax rate is 7%, your calculation would look like this:
To keep your total cost down, focus on the "taxable total." Negotiating the dealer's added options or documentation fees can significantly lower the final amount. Additionally, verify if your state provides a "tax credit" for trade-ins, as this effectively increases the value of your old car by your sales tax percentage.
function calculateCarCost() {
var msrp = parseFloat(document.getElementById('msrp').value) || 0;
var options = parseFloat(document.getElementById('options').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var rebates = parseFloat(document.getElementById('rebates').value) || 0;
var taxRate = parseFloat(document.getElementById('taxRate').value) || 0;
var docFees = parseFloat(document.getElementById('docFees').value) || 0;
var titleFees = parseFloat(document.getElementById('titleFees').value) || 0;
var vehicleSubtotal = msrp + options;
// Calculate tax. In most US states, tax is calculated on (Price – Trade-In)
// Note: Rebates are often taxed (calculated before rebate is applied)
var taxableAmount = vehicleSubtotal – tradeIn;
if (taxableAmount < 0) taxableAmount = 0;
var totalTax = taxableAmount * (taxRate / 100);
var totalFees = docFees + titleFees;
var totalCredits = tradeIn + rebates;
var finalPrice = vehicleSubtotal + totalTax + totalFees – rebates – tradeIn;
// Display Results
document.getElementById('resSubtotal').innerText = '$' + vehicleSubtotal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTax').innerText = '$' + totalTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resFees').innerText = '$' + totalFees.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resCredits').innerText = '-$' + totalCredits.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotal').innerText = '$' + finalPrice.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resultsArea').style.display = 'block';
}