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On Road Price and Ex-Showroom price

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Its all about Money

When considering purchasing a vehicle, there are many factors which people consider. Especially if you have a budget, it is a much thought-out process. Fuel efficiency, space, features, size, and make are few factors. And of course, not to forget, cost of the vehicle which are the primary and most basic factors which any individual considers.

Have you seen advertisements on TV or read online about a vehicle’s on road price is just INR 10 lakh or the ex-showroom cost of a vehicle is INR 7.8 lakh and ever wondered what it means?

Elucidating the Basics

The on-road price is the price you actually pay for the car and it exceeds ex-showroom price by a margin depending upon the model or the car and the State you purchase your vehicle in.

Ex-showroom price is the price at which the dealer procures the vehicle from the manufacturer and the tax that he pays to the Government for the same process. This excise duty charged by the Government is known as supply price of cars. It is advisable to check the price of a car in the city you wish to purchase it from, as the prices in India differs from State to State.

Getting into the Nitty-gritty of it

Also Read : What goes into on road car pricing?

What is on-road price?

Over and above the ex-showroom price, there are few more prices you have to pay which include a lifetime road tax, State registration charge, insurance, number plate charge, sundry expenses and logistics charges which comprise of transporting the vehicle from the warehouse to the showroom. Some additional costs are accessories cost, warranty costs etc.

In sum, the price at which the dealer hands over the key to you is the on road price.

  • Registration Charge- All vehicles need to be registered and it is the unique identity of every vehicle. The license plate (number plate) is issued by the respective State RTO (Regional Transport Office) as a unique identify. Private cars have black lettering on a white background. It is different for commercial vehicles. Each State has its own registration costs and it also depends on the car, make, fuel type etc.
  • Lifetime Road Tax – Before using the vehicle on the public roads, tax needs to be paid and this is known as lifetime road tax. It is based on various rules pertaining to the state Government like traffic regulation, Government rules etc. This is why it differs from State to State. E.g.: Road tax is cheaper in Delhi than in Bangalore.
  • Insurance – Is a mandatory insurance given to all vehicles that are purchased and is primarily a financial protection against any damage like a physical damage which can occur due to traffic collisions etc. Every automaker offer their own rate.
  • Logistics Charge – This charge covers the cost of transporting the car from the warehouse to the showroom, fuel costs, number plate cost, cleaning of the car, delivery charges etc.

The Price which Banks Consider

Depending upon the bank, there are different options available. Private Banks usually offers 85% of the ex-showroom price and Government banks offer 85% of the on-road price. Although, getting a loan eventually boils down to the creditworthiness of the customer. The rate of interest varies and hence, it is imperative to consider both the prices when applying for a loan. Now, it’s safe to say that your confusions are cleared and you have left it back at home when you go car shopping – at least now you understood pricing differentiations.

Your other major concern is which car is more affordable and this information too will be available on Indian Blue Book

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