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!
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