In auto financing, what does purchase price refer to?

Study for the Specialist Automotive Finance Test. Use flashcards and multiple-choice questions with detailed explanations to get exam ready!

The purchase price is the amount you and the dealer agree to pay for the car itself, before any government taxes, duties, and delivery charges are added. In auto financing, the loan is based on this price, not including those additional costs. Taxes, duties, and delivery are separate costs that make up the total amount payable, so they aren’t part of the purchase price. Discounts reduce this price, but the defining idea is that the purchase price excludes taxes and delivery.