How on-road prices are calculated and vary for different cities

If you’re planning to buy a new car, there are a number of things that are to be kept in mind. For starters, you need to know that at the showroom you would get a quote of two prices – ex-showroom and on-road. If you’re not well-informed about what these terms actually imply, well, it’s high time you make yourself aware, for it concerns a major investment and you surely don’t want to land up in a tricky position. The fundamental thing that you should know is that the price one actually pays for the car is the on-road price. Needless to say, that is the most important thing to look at before making a decision. Depending on the car model and the state in which you’re buying it, the on-road price exceeds the ex-showroom by approximately 10%.

a.       Ex-showroom price: this is the basic price of a car which does not take into account any registration charges, insurance, or loadings. It 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, etc.

b.      On-Road price: it is basically the price at which the buyer drives away the car. Typically, the prices that are added up to calculate the on-road price includes:

1.      Registration Charges: This is mandatory for every new vehicle.

2.      Life time road tax: This has to be compulsorily paid on a vehicle before using it on a public road.

3.      Vehicle insurance

4.      Dealer handling charges or logistics charges

Now let us look at each of the components of on-road price in a little more detail.

i.                    Registration charges are the cost entailed to get your vehicle registered. It is a unique identity for your car. This charge differs from state to state, and in a particular state, it will vary on the basis of the car cost, and whether it runs or petrol or diesel.

ii.                  Road tax: This is charged by the government for road improvements and repairs. It is subject to state government rules, traffic regulations, etc. Hence it is not uniform for every state. For example, road tax in Delhi is lesser than that in Bangalore. Again, based on the type of car, road tax might vary. For example, be it any state, the road tax one needs to pay for Maruti Swift is different from new Hyundaii10, which in turn will be different for Hyundai Verna. Two-wheelers and small cars that cost less than Rs. 4 lakh entails a road tax of around 4-6%, whereas for vehicles valued over Rs. 20 lakh, it is somewhere between 7 to 9%.

iii.                Vehicle Insurance: Also known as auto insurance, this is the price paid to provide financial protection against physical damage and/or bodily injury. It is mandatory by law and differs according to different rates provided by different insurance companies in different states.

iv.                Dealer Handling Charges: This is the charge the dealer claims to take the car from warehouse to showroom, the number plate charge, delivery charges, cleaning of car, etc.

Thus, it goes without saying that since the constituents of on-road price themselves is variable and is not fixed for every state, consequently, the on-road pricing too varies from city to city. So before you make up your mind about buying a car, make sure you think well about these factors. Once you’re through with all these crucial details, nothing should stop you from taking the plunge! 

New cars in Mumbai

Planning to buy a new car? Well, there are a few things that you should definitely keep in mind before taking the plunge. After all, it is not only a major financial investment but is also a memorable milestone of your life, one which you’re going to cherish for years to come. And that actually makes car-buying an emotional process as well. But before you indulge in the euphoria of buying new cars in Mumbai, turn on your practical self and make a check-list of the factors you should take in consideration.

Homework

      Budgeting is the first and foremost thing that you should analyze when the thought of buying a new car strikes you. And by budgeting, we do not mean only the purchase price, it is a wiser move to delve into fuel efficiency, service costs, insurance premiums, and so on. Once you decide the price range, move on to outlining the type of car that best meets your needs. There are several makes and models these days, and you should take your pick after giving sufficient thought. You should also dwell on whether you want to buy a diesel car or a petrol car.

2.      The Test Drive

      You should never buy a car based solely on someone else’s opinion. It is imperative to keep in mind that what is right for someone else might not be right for you. Go for a comprehensive test drive in traffic that will give you a concrete idea about the comfort of the driving position and engine responsiveness. For second opinion, you can consider taking along someone – a friend or a relative – preferably someone with a basic knowledge of cars. Also, make certain that every commitment made by your dealer is given to you in writing and signed on their letter head.

3.      Sealing the deal

      Do sufficient research on the available discounts; this ‘shopping around’ will prove to be completely worth it in the long run. You can also consider calling a Direct Sales Agent for a quote. Also, make sure you check the actual interest rate rather than the quoted one, as this often reveals glaring discrepancies. Keep in mind that getting a loan against fixed deposits has a number of advantages, including lucrative interest rates, minimal paperwork, and flexible repayment plans. When t comes to buying accessories, you should crosscheck their prices between the showroom and after-market dealers. Dealerships usually make a significant amount of money on accessories; in case they are bundling accessories for free, verify their quality and brand. Last but not the least, it is advisable to buy insurance yourself after taking a few quotes from insurance companies/agents. Dealerships usually make hefty commissions on every insurance policy sold.

However, this is not an exhaustive list. There are quite a few other things that are to be taken care of, to ensure that you have a satisfactory experience of buying new cars in Mumbai. It is an event of your lifetime, so make it fulfilling in every way you can! 

How to decide on buying a new car?

Are you wondering how to decide on buying a new car? The decision requires loads of homework, patience and perseverance on your part. You should always venture to purchase a new car after having done your homework. After all, a car represents a vital investment for you and your family. You do not want to be stuck with a wrong choice for quite a few years especially if you are going out on a limb and paying high EMIs to own the same. The first thing to remember is that you should have the financials completely worked out. You should know how much down payment you can ideally fork out for the new car without putting your bank account into complete jeopardy. Ideally, a minimum of 10% is sought by banks and dealerships alike while there are often special offers like zero down payment though this is not advisable since this only inflates interest rates and loan amounts in the future.

Try to pay as much as possible upfront, preferably up to 20-25%. Once this is achievable, you should then work out the loan amount you need, your eligibility and other factors. In case you have no other loans and possess your own accommodation, your car loan EMI should not exceed a maximum of 15-25% of your income in an ideal scenario. You should also budget for costs like yearly insurance, yearly service and maintenance, fuel costs every month (calculate the average distance you will need to travel and find out about the mileage offered by the car model you want to buy) and other expenses including chauffeurs and the like. Once all these expenses are budgeted along with the costs related to registration, one-time insurance and other taxes, you’re all set to buy your dream car.

The entire process should have you in a cool and calm frame of mind even though buying a car is an emotional decision. Never be in a hurry to buy your dream car even if you cannot control your excitement! You should also do your homework about the future depreciation in the value of your car and the total cost of ownership. You should also find out about probable service costs and approximate insurance premiums that you have to pay in the future. You should also decide on the kind of car you need. If it is entirely a utility purchase, you should look to meet basic needs of yourself and your family. If it is a small family, you can opt for a hatchback or even a sedan depending upon your budget and preferences. If you have a large family, an MUV is a good bet and if you love bigger and rugged cars, you can opt for an SUV if you are okay with the size, higher prices and other hurdles to owning these beasts in congested cities.

There is another decision that you should make as well. You should choose between a diesel or a petrol car. New age diesel cars are more fuel efficient, high performing and clean. Petrol cars are okay if you have lower commutes and are looking primarily for driving pleasure. However, diesel is a must if you drive long distances every day and are looking for better mileage and more power. You should never neglect safety options when choosing your car. Always look for features like ABS with EBD, traction control systems and airbags. If you are buying a variant that does not come with standard safety features like these, paying a little more for optional safety features is highly recommended. These are well worth it since safety comes first on our treacherous Indian roads.

You should also keep an eye out for car models that are in their new generation. Find out whether your chosen car model is about to be phased out or discontinued. Find out whether the new generation model or face lift is about to be introduced in a few months or a year. The best option is to wait since a new generation vehicle will be a better investment and will hold considerably better resale value. If you end up buying a car model that is about to be phased out, you will face huge problems relating to finding components and other parts. Resale value will also be a big problem. Most car models get an upgrade after every 3-4 years.

Do not rely blindly on advertisements for information on vehicles. You should try and talk to as many car owners as possible along with reading up on reviews about the car you want to buy. Do not buy your vehicle from dealerships that are not authorized even if they offer amazingly low prices and other discounts. You should always buy from official dealerships for the sheer security and comfort involved in the process. You will always have access to proper service, maintenance, car care and customer service if you buy from a proper dealership. This is one mistake that most people make with very problematic implications. You should look for dry spells while buying cars instead of the festive season, Christmas and New Year. These are times when dealerships sell models in droves. If you buy your vehicle at a time when sales are not too high, you stand the chance to get better discounts and customized offers as well.

When test driving the car, focus on how you feel with regard to maneuverability and overall performance. You should not just drive a single kilometer; this will never give you a definitive idea. You should always make sure that a car connoisseur or expert driver is with you when you are taking the test drive in case you are not driving yourself. Always make sure that the promises and tasks of the dealership are jotted down in the official letterhead. This is just to ensure complete peace of mind and greater accountability from the dealership. These tips will make your car buying decision a smoother and more satisfying one.