Difference Between A Vehicle’s Ex-Showroom Price and On-Road Price

Buying a new car is often a dream for many. Some choose to buy it early in their life while a few others patiently wait for the right time. Evaluating the necessary finance options is also critical in the buying process. In either case, as a vehicle buyer, you need to be aware of the details that constitute the price of your car/bike. And that’s where understanding the ex-showroom price and on-road price become crucial. This article elaborates on the meaning of both terms and the different components that are considered in their price. Here’s a breakdown of it.

What is the Ex-Showroom Price?

Ex-showroom price is the cost price of the vehicle; meaning, the price of the car without considering the registration charges, the taxes involved, and the motor insurance cover. While the above three components mentioned are critical to driving/riding a vehicle legally, they are excluded from the ex-showroom price. For a layman, the ex-showroom price is the price at which the vehicle is advertised by the manufacturer. Thus, the applicable goods and service tax, road tax, and other regulatory charges, are excluded from the ex-showroom price. Also Read: Bharat NCAP Ratings For Cars – All You Need to Know

What is the On-Road Price?

On-road price, as its name suggests, is the price that you pay to get the vehicle home or be able to legally drive/ride on the roads. The ex-showroom price forms the basis for determining the on-road price. In addition to the ex-showroom price, it also includes road tax, goods and service tax, vehicle insurance cover. and other optional charges. * If you want to fit any accessories to your vehicle that are offered by the dealer, the dealer will include them in the on-road price. When shortlisting various vehicles, you can not only look up the ex-showroom price; you must also consider its on-road price offered by different websites. Additionally, any concessions that are offered by the dealer are also deducted from the on-road price. * To summarise, on-road price is the price you finally pay from your pocket (or obtain finance for) to get the vehicle home. Also Read: Indian Motor Vehicle Act 1988: Features, Rules & Penalties * Standard T&C Apply

Difference Between a Vehicle’s Ex-showroom Price and On-road Price

While the final price of the vehicle is arrived at after including registration fees, road tax, tax collected at source, green cess, cost of extended warranties purchased (if any), annual maintenance charges, handling charges, and cost of accessories, it also includes a substantial cost of the motor insurance policy. The Motor Vehicles Act of 1988 makes it mandatory for all vehicles to have at least third-party insurance coverage. Thus, no vehicle, that is legally driven/ridden, can ply without a motor insurance policy. Selecting a motor insurance plan can be confusing with the myriad alternatives that are available. Here’s where you can make use of a car insurance calculator or two-wheeler insurance premium calculator. Both these tools allow you to compare the available plans, not only based on their price, but also on the feature sets they have on offer.

Additional Components for New Vehicle (On-road Price Factors)

1. RTO Registration Charges: The cost of registering your vehicle with the Road Transport Office, which includes the number plate and documentation fees.
2. Road Tax: A one-time fee paid to the government, based on the vehicle's type, engine capacity, and the state in which it is purchased.
3. Insurance: The cost of comprehensive insurance or third-party insurance, which is mandatory for all vehicles.
4. Extended Warranty: Optional plans offered by manufacturers or dealers for an extended coverage period beyond the standard warranty.
5. Handling and Delivery Charges: Fees charged by the dealership for vehicle delivery and processing, including transit insurance and handling of logistics.
6. Accessories: Optional items like floor mats, seat covers, or sunshades that you can purchase to enhance your vehicle’s features.
7. Service Charges: Some dealerships include the cost of first-year service packages or free services as part of the on-road price.
8. Environmental/Green Tax: In some states, an additional charge for vehicles based on emissions standards or environmental impact.

How to Get an Effective On-road Price

1. Research the Ex-showroom Price: Begin by checking the manufacturer's website or authorized dealerships to find the ex-showroom price for the model you're interested in. This price typically excludes registration, insurance, and other on-road components.
2. Compare Prices Across Dealers: Prices for the same model can vary from one dealership to another due to factors like dealership policies and location-based charges (e.g., RTO and taxes). It’s wise to request quotes from multiple dealerships.
3. Check for Promotional Offers: Dealerships may offer discounts, special packages, or deals, especially during festivals or year-end sales. Inquire about these offers to reduce the on-road price.
4. Account for Additional Costs: Keep in mind that optional accessories, service packages, and other add-ons will increase the final price. Make sure to evaluate the total cost of ownership, including future service costs.

FAQs

How to arrive at a vehicle’s Ex-showroom Price and the On-road Price?

To calculate the Ex-showroom Price, simply check the vehicle's base cost set by the manufacturer. The On-road Price includes this along with additional charges like taxes, registration fees, insurance, and dealer charges.

Is it possible to get a discount on the vehicle’s Ex-showroom price?

Yes, discounts on the ex-showroom price may be available during festive seasons or promotional offers, or through dealer negotiations. However, such discounts are usually limited and depend on stock levels and sales goals.

Why is it that in most cases the On-road Price of the vehicle is not advertised?

The on-road price varies significantly based on factors like location, state-specific taxes, and dealer-specific charges. Since it differs for each customer, it’s not commonly advertised.

Does a vehicle’s ex-showroom price include applicable taxes?

No, the ex-showroom price does not include taxes such as GST, road tax, or registration charges. These are added separately to calculate the on-road price.

Why is the on-road price higher?

The on-road price is higher because it includes the ex-showroom price plus additional costs such as taxes, registration fees, insurance, and optional accessories or packages. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.