When you go to buy a car or a two-wheeler at the showroom two prices would be quoted ex-showroom and on-road. The price you actually pay for the car is the on-road price, so you better look at that when making your decision. The on-road price exceeds the ex-showroom by around 10%, depending on the car model and the state in which you are buying it.
Prices associated with a car or motorbike
that the car prices in India vary from one state to another. The basic factors that contribute to car prices in any state are ex-showroom price, ex-factory rate, and ex-road rate.
Ex Factory Price of Car : is the price Car Dealer pays to Manufacturer to lift the car from them i.e it is the price at which a car manufacturer sells the car. Ex-Factory Price Terminology is not so common as it is between the Manufacturer, Dealer
Ex Showroom Price of Car : Ex-showroom Price of Car is the is the price at which a car dealer sells a car to Retail Customers which includes Dealer Margins, Transportation costs and applicable Excise, State Taxes and Octroi Charges. Ex-showroom Price is called the basic price of the asset exclusive of any registration, insurance or loadings.
On Road Price : On Road Price is the final Price payable by the customer to the car dealer and is also known as Invoice Value of the car it includes State Registration Charges, Life Time Road Tax Payment, Mandatory Insurance and the dealer handling charges (aka Logistics Charges). Also includes optional costs such as Accessories cost, additional optional warranty coverage. The discounts if any will also be shown and reduced while calculating the Net On Road Price. Ex-road price refers to the price at which the buyer drives away the car.
What is ex-showroom price?
Ex-showroom price is the cost that the dealer charges for procuring the car from the manufacturer and the tax that it pays to the state government on procurement. The state government charges excise duty on cars. It is also known as the supply price of a car. In some states and cities, ex-showroom price may also include octroi tax. This is the tax collected by the local authority for bringing articles from outside the region for consumption in that region. Ex showroom prices differ from state to state. For instance, ex-showroom prices are higher in Mumbai or Bangalore than in Delhi.
- Registration charges : Registration is mandatory of every new vehicle. It is a unique identity of vehicle
- Life Time Road Tax : Road tax, known by various names around the world, is a tax which has to be paid on a vehicle before using it on a public road.
- Vehicle Insurance :also known as auto insurance, is insurance purchased for cars, trucks, motorcycles, and other road vehicles.
- Dealer Handling Charges or Logistics charges: Dealer claims handling charges in name of taking car from warehouse to showroom
Difference between Onroad price and ex-showroom price for Hyundai as on Jun 2013 is shown below. Click on image to enlarge.
- All motorised road vehicles are tagged with a registration or licence number in India. The licence plate (commonly known as number plates) number is issued by the district-level Regional Transport Office (RTO) of respective states
- Plates for private car and two-wheeler owners have black lettering on a white background (e.g., TN 54 BB 0525). Commercial vehicles such as taxis and trucks have a yellow background and black text (e.g., KA 10 MA 8008). The current format of the registration index consists of 3 parts, They are
- The first two letters indicate the state to which the vehicle is registered.
- The next two digit numbers are the sequential number of a district. Due to heavy volume of vehicle registration, the numbers were given to the RTO offices of registration as well.
- The third part is a 4 digit number unique to each plate. A letter(s) is prefixed when the 4 digit number runs out and then two letters and so on.
|Place||Cost of Car||Registration charges|
|Delhi||Upto Rs. 6 Lac||Petrol Cars – 4%, Diesel Cars – 5%|
|Price between 6 Lac – 10 Lac||Petrol Cars – 7%, Diesel Cars – 8.75%|
|Price > Rs. 10 Lac as Exshowroom Cost –||Petrol Cars – 10%, Diesel Cars – 12.5%|
|+ MCD Parking Charges||Rs. 2000 for cars priced under 4 LakhRs. 4000 for rest of the vehicle|
|Karnataka (Bangalore, Mysore, Udupi)||Karnataka has highest vehicle registration charges withminimum slab starts @ 15%|
|Price < 5 Lakh – ·||15%|
|Price between 5 – 10 Lakh||16%|
|Price between 10 – 20 Lakh||19%|
|Price > 20 Lakh||20%|
- The road tax imposed is subject to state government rules, traffic regulation etc. So it differs from state to state in India.Road tax in Delhi is lesser than in Bangalore and therefore the car you buy from Delhi is priced lower than that you buy in Bangalore.Even within the state it is based on type of vehicle, cost of vehicle etc. In any state Road Tax for Maruti Swift is different from Hyudai i10, road tax for Hyudai i10 is different from Hyundai Verna and road tax for Hyundai i10 with 1.1 metallic color is different from Hyundai i10 non metallic color.
- Road tax for vehicles that cost less than Rs 4 lakh (two-wheelers and small cars) is around 4%-6% whereas it is between 7% and 9% in case of vehicles valued over Rs 20 lakh, Centre is likely to decide uniform lifetime road tax for cars, taxis and two-wheelers. The state governments have agreed to fix the tax at floor rate of 6% of the sale price before the value added tax (VAT).
- It is usually paid once in life time of the vehicle in a state hence it is called as Life Time Road Tax. But If one shifts or relocates vehicle from one state to another state in one has to re-register vehicle and pay lifetime tax again, based upon the depreciated value as assessed by RTO of the new state. The value of vehicle diminishes year after year. Once the residual value of lifetime tax is paid, it is possible of life-time tax paid in the earlier state on pro-rata basis, by writing to the earlier State’s RTO for the same. However, this is a manual process and therefore, it takes a lot of time before you actually get the refund
Dealer Handling Charges or Logistics charges: Dealer claims handling charges in name of taking car from warehouse to showroom , basic fuel,the number plate charge, cleaning of car, sundry expenses as delivery charges. The amount is quiet high and ranges from Rs. 6000 for a hatchback car to upto Rs. 25,000 for Luxury Segment Cars. The Amount is much dubious considering the high price paid for. However, the charges are not claimed by dealers in India, but across most of the countries in the world as Handling Fees, Documentary Fees or even Vehicle Preparation Fees
When you are searching for car online, you would find mostly ex-showroom price. Make sure you also check car ex-showroom prices in your state because car prices in India differ from one state to another. And find out the on-road price of the car. Some car based websites provide this information once you give your email,mobile number details. Do you think charges like Dealer Handling charges does not make sense.