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

Posted on: May 18, 2023 | | Written by:

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

Published on May 17, 2023. EST READ TIME: 3 minutes

Buying a new vehicle is a whole new level of excitement, especially if it is your first vehicle. Once you have arranged the finances required to purchase your dream vehicle, it is also necessary to understand the details of purchasing a vehicle. Right from the features of the vehicle to its actual price, every detail must be carefully checked so you can fix a practical budget and find the most suitable vehicle under your budget. There are two important terms you may have come across when planning to purchase a vehicle; ex-showroom price and the on-road price. Let's discuss the difference between ex showroom price and on road price detail.

What is Ex-showroom Price?

Ex-showroom, as the name says itself, is the showroom price of a vehicle. It is the price that a car/bike dealer pays to the manufacturer of the vehicle. It is not an all-inclusive price which means it only includes factory cost, GST, and the profit of the dealer. There are several other costs, like car insurance , registration fees, etc., which are included in the ex-showroom price. These are only paid by the end consumer of the vehicle.

What is On-road Price?

On-road price is the actual price that a consumer pays to finally bring the car/bike out of the showroom for driving on the road. In simple words, on-road price is the price that a consumer pays to the vehicle dealer, and it includes car insurance cost, registration of the vehicle, and road tax. Apart from these, if you wish to accessorise your vehicle with additional features, the cost for the same is also included.

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

Check out the table below for a quick tour of the difference between ex showroom price and on road price:

Ex-showroom Price	On-road Price
It is the cost paid by the vehicle dealer to the vehicle manufacturer	It is the cost paid by the end consumer to the vehicle dealer
This is not the final price of a vehicle	This is the final price of a vehicle
It includes goods and services tax, profit of the dealer, and factory cost of the vehicle	It includes the dealer's price, registration charges, vehicle insurance cost, road tax, and other charges (number plate, FasTag)
The ex-showroom price is low and is generally the price that is shown to the buyer.	The on-road price is higher and the final price includes all the payable taxes and fees.

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

Why is the on-road price higher than the ex-showroom price? This is one of the commonly asked questions. Check out the road tax fees and registration charges in the table given below:

Type of tax	Cost
Road tax	Every state has its own road tax law and charges. Union territories have comparatively lower road taxes and Karnataka remains one of the states charging the highest road tax in India
Registration charge	INR 600 (all types of cars)
Hypothecation charges	INR 1500 in case you borrow a vehicle loan
The number plate of the vehicle	INR 230-400 for the HSRP plate
Parking fees (applicable in selected states)	INR 2000 for cars under INR 4 lakhs INR 4000 for cars above INR 4 lakhs
Temporary registration charges (up to 1 month)	INR 1500-2500
FasTag	INR 500-600
TCS (Tax Collected at Source)	TCS is paid by the customer to the dealer. It is 1% of the ex-showroom price
Green Cess	It is the pollution tax imposed on all private and commercial vehicles
Transportation charges	The cost of transporting a vehicle from one place to another
Vehicle insurance charges	Depending on the type of vehicle insurance chosen, the charges may vary
Miscellaneous	• Cost of accessories installed in a vehicle • Cost of extending the warranty of a vehicle • Cost of additional products and services purchased from the dealer like annual maintenance package, etc.

Road tax can drastically impact the on-road price of a vehicle. While some states and UTs have comparatively lower road taxes, some charge hefty amounts. Road tax depends on several factors engine capacity, the weight of the vehicle, seating capacity, fuel type, etc. While UTs like Delhi charge 4% road tax, Karnataka charges 12%. So, if the ex-showroom price of a vehicle is INR 8 lakhs, the road tax in Delhi will be INR 32,000, and in Karnataka, it will be INR 96,000. Apart from these, your preferred insurance, like comprehensive car insurance , accessories cost, taxes, etc., is also calculated. So, the costlier your car, the higher will be its final on-road price.

How to Get an Effective On-road Price?

The ex showroom price and on road price differences remain high. However, you can definitely make sure that you keep these extra charges of on-road price under your budget by ensuring the following tips:

1. Choose dealer's products carefully

Accessories, services, and products offered by dealers sound quite interesting. While some accessories, like floor mats, seat covers, etc., are essential, others can be avoided if you do not find them very useful.

2. Cost of the vehicle

Your vehicle's cost directly impacts the road tax charges. So, the higher your vehicle's price, the higher will be the road tax. So, make sure you calculate the road tax while choosing a particular vehicle.

3. Check out deals and offers.

During festive times, several vehicle dealers announce offers and discounts, which can help you save to a great extent.

4. State or purchase

Some states have lower road tax values, and some have higher taxes. You may look forward to getting a vehicle from a neighbouring state and getting it transferred to your city if that costs you less than the on-road price of your state.

Conclusion

Before purchasing a vehicle, understanding ex showroom price and on road price differences is important. You can use the on-road price calculator to quickly calculate the final price of your preferred vehicle. By following simple tips, as aforementioned, the difference between ex showroom price and on road price can be lowered. Also, do not forget to get the best available insurance plan for your vehicle. Make sure you get a higher insured declared value (sum assured by the insurer in case the vehicle is lost/stolen/irreparably damaged) for a better driving experience.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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