Read this article to know the difference between ex-showroom and on-road price of a car.
While you surf the internet to know the prices of your favorite car, you come across a term ex-showroom price. What is that price? Is it the final cost of the car or would you need to shell out more when you visit a dealership?
No, it’s not the final price and you have to pay more over the ex-showroom price at the outlet. There are several charges that add-on before the vehicle can finally make it to the road.
Although most car owners are aware that the prices they see in newspaper advertisements or online are ex-showroom ones, the oblivions get a shocker when they step in car showrooms.
Let’s delve into more details to understand the different elements that make up for the on-road price.
The ex-showroom price of the car includes the manufacturing cost along with a GST (Goods & Service Tax) amount. The percentage of GST is not fixed; it varies depending on the fuel type, usage and body length of the car. The dealer profit is also included in the ex-showroom price. Moreover, the ex-showroom price may differ based on cities. The difference is due to the cost of transporting the vehicle from the manufacturing plant to the respective city, along with other local taxes, if applicable. However, many carmakers are now coming up with a single ex-showroom price, pan India.
Above the ex-showroom price, the consumer needs to pay for insurance, registration and road tax. The total outcome of this amount is the on-road price of any car. In short, it’s the total cost which you need to pay to drive the car on Indian roads. Let’s understand the three key elements that make up for the on-road price.
1. Car Registration Cost
Registration is a mandatory process for every new vehicle purchased in India. After processing the details, you will be presented with a license plate which will have a unique registration number. However, all this process will incur additional charges. These charges are paid to the RTO of the respective state for generating the alpha-numeric registration number. The amount varies depending on the type of car.
2. One-time Road Tax
The new car will also bear the burden of one-time road tax before it hits the tarmac. Based on the ex-showroom price of the car road tax percentage may range from 3 to 20 per cent.
3. Car Insurance
It is mandatory to have third-party car insurance for every car that runs on Indian roads. Failure to procure one calls for a penalty. On new car too, you have to buy the insurance based on your preference – third-party, comprehensive, zero-dep, etc. The cost of insurance is calculated separately.
As per the Supreme Court, 1 per cent of Green Cess applies to all cars in India which have over 2000cc engines (irrespective of fuel type).
Besides these charges, if you are interested in buying optional accessories, extended warranties or maintenance packages, you will be charged separately.
So, the next time you check-in in a car dealership, you know what to expect, right?