The Difference Between Ex-Showroom And On-Road Price Of A Vehicle

This article explains the key difference between ex-showroom price and on-road price of a car, helping buyers understand what each includes and why the final amount payable is often higher. It breaks down the various components, such as registration charges, insurance, and taxes, enabling you to make a more informed car-buying decision.

The ex-showroom cost of a car is the cost that does not include road tax and other registration charges that are necessary to operate your vehicle legally on the roads in the country. The ex-showroom charge simply includes the cost of the vehicle as advertised in the brochure. The ex-showroom price does cover the GST of the vehicle you are buying.

Now that we know what the meaning of ex-showroom price of vehicle is, let’s examine the on-road price.

The on-road price of a car is the price that includes all the additional or overhead charges you need to pay to operate your vehicle on the roads. These charges include the RTO registration fees, road tax, and motor insurance costs. It can also include other charges, as relevant under the laws.

The extra charges that can be added to your vehicle’s on-road price can also include green cess and certain logistics charges. One may also end up paying more if they opt for additional accessories to be added to their car. You can also opt to extend the warranty of your vehicle by paying a bit more. This can prove to be a wise decision when buying a new vehicle.

As we can see, the on-road price of a vehicle will be more than the ex-showroom price.

A common observation is that a new vehicle's on-road price varies across locations. This is indeed true, and the reason lies in the difference in the state government, city authorities, and the Regional Transport Office (RTO). Each has its own set of road taxes, vehicle-related fees, and penalties for traffic law violations. 

Hence, when you calculate your new vehicle's on-road price, refer to the state/region-specific websites to know the applicable amounts. Also note that, since these amounts are set and applied by state authorities, they are subject to change at their discretion. Therefore, refer to official website notifications and the regional news to know their applicability. 

Even when you are planning to buy a second-hand vehicle, its on-road price could vary. This is because a second-hand vehicle sales portal or a traditional in-person agency quotes an advertised price. Furthermore, this price is not fixed but is discussed by both parties to reach a final price.

The price may or may not include the on-road price component. In fact, if you plan to buy the car and move to a different region or state, you will have to re-register it with the respective RTO. This is associated with a cost. If you plan to upgrade the car components for better performance or wish to upgrade to a comprehensive insurance plan, it will impact the final on-road price you may. 

Here’s a small comparison of the on-road vs ex-showroom price: 

As per existing laws, motor vehicle owners are required to have a minimum of third–party car insurance to drive their car on the roads in India. Whether you are buying a new or a second–hand car, remember to opt for the right motor insurance. In case of a second-hand car, ensure to get the insurance transferred from the previous owner over to your name. You can also consider upgrading to comprehensive car insurance for better coverage for your vehicle.

Understanding the difference between a vehicle’s ex-showroom price and on-road price can help you plan your budget better and avoid unexpected costs at the time of purchase. Knowing what each price includes allows you to make a more informed and confident buying decision. 
To protect your precious vehicle from unforeseen risks, SBI General Insurance offers reliable and comprehensive car insurance solutions for added peace of mind.
 

1. What is included in the ex-showroom price of a car?

The ex-showroom price is the total price of the car before additional charges like registration and insurance. You can consider it to be the advertised price. However, the total vehicle cost goes beyond it. 

2. Why is the on-road price higher than the ex-showroom price?

The on-road price includes all costs: the purchase cost, applicable taxes, registration fees, warranty fees, insurance premiums, and additional costs. Since it is a comprehensive cost, it is higher than the ex-showroom price. 

3. How is road tax calculated in India?

The State government calculates the road tax; hence, it differs across the country. Visit your state government website or road transportation website to know the applicable taxes. 

4. Does the on-road price include insurance?

Yes, the on-road price includes insurance. However, generally, it includes the third-part insurance premium. It is advisable to opt for comprehensive insurance, as it can help protect your vehicle from unexpected events.

5. Can I buy a car at ex-showroom price only?

You can initially buy the car at the ex-showroom price. But in order to be able to legally use the car on the road, you need to pay associated taxes and fees, which indicates the on-road price.