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.

Please Note: The explanation of the on-road price provided above is a general overview and does not reflect how Digit determines the on-road price specifically for motor claims under the Return to Invoice cover. For detailed information, please refer to the official policy document. You can find more information about Digit's Return to Invoice cover here.

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!