What is Ex-Showroom and On-road Price?

What is Ex-showroom Price?

The Ex-showroom Price of a vehicle is the cost of a car without considering the charges paid for registering the vehicle at the Regional Transport Office, Road Tax, and Insurance.

Here are a few points explaining the meaning of Ex-showroom Price.

• The three components mentioned above are vital to ride/drive a vehicle on public roads in the country. Not following the rules regarding these components can attract hefty penalties.
• The Ex-showroom Price of a vehicle includes the ex-factory cost, Goods and Services Tax and the vehicle dealer’s profit margin.
• It is the price at which the vehicles are usually advertised.

What is On-road Price?

The On-road Price of a vehicle is the price you pay to bring the vehicle from the showroom to the road. Thus, it is named as the On-road price.

Here are a few points explaining the meaning of On-road Price.

• It includes the Ex-showroom Price, charges for registration, road tax, and insurance, and any other optional charges.
• For example, if you want your new car to feature some new accessories offered by the dealer, the dealer will add that cost to the vehicle’s final On-road bill.
• You can browse the internet to find an Ex-showroom to On-road price calculator or simply get in touch with the vehicle dealer for it.

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

Here’s a table highlighting the key differences between the two prices.

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

The On-road Price of a vehicle is dependent on several factors. Some of these are mandatory while some are optional. For example, you need to pay the vehicle registration charges, insurance premium, and road tax; however, the amount paid for extra accessories, extended warranty, etc. is optional.

Make sure this does not happen to you by knowing about the vehicle’s actual price and planning your purchase accordingly. Here’s a list of additional components that are over and above the Ex-showroom Price of a vehicle.

1) Registration Charges:

Whether you buy a bike or a four-wheeler, it needs to be registered at the local Regional Transport Office (RTO). In most cases, the vehicle dealer does this for you and includes the incurred cost in the On-road Price. Such type of vehicle registration is mandatory by Indian law if you want to use your vehicle on public roads.

One can know of the state and the RTO where the vehicle is registered by looking at the number plate as it features the State Code (alphabetic code) and the RTO/Area Code (numerical code). The registration charges of the vehicle can differ from one Indian state to another. Also, you will have to pay extra if you want a special or a fancy registration number. The registration number is displayed on the vehicle’s number plate.  

2) Road Tax:

In simple words, it is the tax that the vehicle owner pays to use the vehicle on Indian roads. This kind of tax is calculated on the Ex-showroom Price of the vehicle; it is calculated based on a certain percentage. Usually, it is in the range of 3% to 20%. The validity of this payment is for ten to fifteen years.

3) Tax Collected at Source:

The dealership charges 1% of the vehicle’s Ex-showroom Price as Tax Collected at Source (TCS).

4) Green Cess:

This amount is also based on the Ex-showroom Price. The exact per cent might vary depending upon the prevalent government policy.

5) Extended Warranty:

Most new vehicles come with a certain warranty period. This is the manufacturer’s warranty. It is either restricted by time or the distance travelled. For instance, the warranty can be for one year or a fixed number of kilometres covered by the car.

You have the option to extend this warranty by paying extra. This cost will be included in the vehicle’s On-road Price. Such an extension can also be helpful for the vehicle’s resale value. A second-hand vehicle with a warranty is more valuable than a second-hand vehicle without one.

6) Annual Maintenance Package:

Your vehicle dealer might offer you an Annual Maintenance Package comprising vehicle cleaning, polishing, servicing, Roadside Assistance, etc. Check for double coverage; if your insurance policy offers Roadside Coverage then you do not need it from the dealer.

Go through the package details, compare them with other service centre’s plans and then make the decision. This is an optional package. If you choose to go with the dealer’s choice, the vehicle’s On-road Price will increase.

7) Handling Charges:

In most cases, the charges for transporting the car from the factory to the dealer are covered in the dealer’s margin. If you want the vehicle to be transported to a particular location, then you can discuss it directly with the dealer.

8) Essential Accessories:

Usually, when most vehicle users start using certain accessories, they become essential. For example, floor mats, seat covers, etc. can be termed as essential car accessories. You have the option to buy them for an extra cost from the car dealer or any other shop. If you buy from the dealer, it will reflect in the vehicle’s On-road Price.

9) Extra Accessories:

You can buy these extra accessories by paying extra. For a car, you might want a better entertainment system. All of this will cost extra.

10) Insurance:

Vehicle Insurance is a mandatory requirement as per The Motor Vehicles Act. Failing to insure your vehicle and using it on public roads can attract hefty penalties. While insuring the vehicle is compulsory, you do have a choice when it comes to the insurance policy.

You have the option to buy a Third-party Policy or a Comprehensive Policy. The basic difference between the two is the ‘Own Damage’ cover that is offered by the latter. The ‘Own Damage’ cover insures your vehicle and also offers Third-party coverage, which is mandatory. 

Vehicle dealers often have tie-ups with insurance providers. Make sure to go through the coverage and buy a policy that suits your needs. You can opt for a different policy or a different insurer as well.