Difference Between Ex-Showroom Price and On-Road Prices of Vehicles

Source: moneymint

Buying a vehicle is often a moment of pride and joy for a buyer. However, one of the many things you should know when you purchase a car is the difference between ex-showroom and on-road prices.

This article will discuss just that, so let's get started.

Ex-showroom cost of a vehicle is the amount of money you pay to buy a car without any additional RTO, Road Tax, and insurance payments.

Hence, although these three payments are essential, if you want to run your car/bike on the nation's roads, they are not included in the ex-showroom cost.

Moreover, this price includes the following -

• Ex-factory charges
• GST
• Vehicle dealer's profit margin

Finally, it is the price tag at which vehicles are usually advertised.

A vehicle's on-road price is paid to bring a vehicle from a showroom to the road. On-road cost includes the ex-showroom price, RTO registration, road tax, insurance, and other charges such as logistics charges.

Logistic charges include the cost of transporting from a warehouse to a showroom, number plate charge, and other sundry expenses.

For example, if you have opted for some of the dealer's accessories, the price will be added to give the final on-road price. You can easily retrieve Ex-showroom and on-road price from the calculator or else communicate with vehicle dealer.

Now, let's look at the difference between ex-showroom price and on-road price!

Here are some factors that influence a car's on-road price -

1. Annual Maintenance Package

A dealer may offer you an annual maintenance package comprising of the following:

• Polishing
• Cleaning
• Servicing
• Roadside Assistance

So, what should you look out for? If your insurance covers the annual maintenance, there is no need to opt for a dealer's plan unless you get a better deal.

2. Essential and Extra Accessories

Some essential accessories are floor mats, seat covers, while some extra accessories are the biker's jacket or a stylish helmet. A car's on-road price generally includes their prices.

3. Extended Warranty

You have the option of extending the vehicles' warranty by paying extra. So when you resell it with a warranty, it has a greater value. This additional warranty will be counted with the on-road price of a car.

4. Green Cess

Green cess varies from State to State and may depend on the ex-showroom price of a car.

5. Handling Charges

A dealer usually covers handling charges or the money taken to transport the vehicle from the factory to the showroom. It is included in a dealer's margin and is a part of the ex-showroom price.

6. Insurance

You cannot drive your vehicle on India's roads without adhering to the Motor Vehicles Act that stipulates that you must drive your car with insurance. Usually, a dealer will have a tie-up with an insurance provider, or you can get your own. This will, however, come under the on-road price of a car.

7. Registration Charges

Every vehicle has to be registered with the nearest Regional Transport Office. A vehicle dealer will typically undertake this task for you. After that, you will get a license plate without which you cannot drive. Hence, this price is also added to the on-road price.

8. Road Tax

You also have to pay road tax applicable anywhere from 3-20% of a car's ex-showroom price.

9. Tax Collected at Source

A dealer also charges 1% of the vehicle's ex-showroom price as Tax Collected at Source.

10. Registration charges

You must mandatorily register the two or four-wheeler to the local regional transport. The registration charge differs from one state to another. In case, you wish to use special registration number, you have to bear extra charges.

3 items influence the ex-showroom price of a car. They are GST, ex-factory price and dealer's margin.

In conclusion, in the ex-showroom price vs on-road price, the ex-showroom price is lower than the on-road price. Moreover, the ex-showroom price varies from city to city. For example, it may be more in Mumbai than it is in Delhi.

So that was all about the difference between ex-showroom price and on-road price!