Base price – What it is, definition and concept

The term base price can be used in different contexts. In the automotive market, it refers to the price of the vehicle without including add-ons or additional fees.

That is, the base price is the one that does not consider options or extra charges, which are added once the purchase of the car is completed.

To mention some examples of extra expenses that are not included in the base price, we can mention shipping cost, sunroof, anti-corrosive coating or the registration fee. The latter, according to the sources reviewed for this article, is a charge characteristic of the US market. It is required to register the car with the appropriate state motor vehicle agency.

Other types of extra charges that are not included in the base price of the car are sales tax and documentation fees. The latter refer to the dealer’s expenses for processing all the paperwork corresponding to the sale.

Product of all these additional charges mentioned (and others), the sale price of the car ends up being different from the base price. The difference can even be hundreds or thousands of dollars. This, depending on whether the buyer decides to add many accessories.

At this point, it is worth clarifying that there are additional costs that are optional or optional, such as the sunroof that we mentioned. However, others are mandatory, such as documentation fees.

Another issue to keep in mind is that, given these extra charges, the buyer should consider them when comparing the options available to purchase a new vehicle.

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For example, the base price of a vehicle may be $30,000. However, by adding fees and add-ons, the buyer ends up paying $37,000.

Base price of an auction

Another meaning of base price can be, in the framework of an auction, the price from which bidders start. Thus, it serves as a reference for public auctions of real estate, for example, lots that have been declared abandoned. In these cases, the respective government entity or authority proceeds with the auction of the lot without an owner, setting a starting price (base price).

In the example referred to, the base price will normally be calculated through a real estate appraisal. The whole procedure, of course, is defined in the law. In this way, it is expected that the lot will be awarded to the bidder who offers to pay an amount greater than the base price.

It may then be that the public auction of the lot starts with a base price of $60,000 and ends up selling for $70,000.

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