Sometimes it may take years of saving to buy your dream car. Most of us are well aware of the expenses of purchasing a new vehicle with financing and bank loans now available. It's not a much bigger task to buy a car or bike nowadays. The financing had made purchases so flexible and easy. But, when you simply take a loan and enter a dealership to buy a two-wheeler or four-wheeler, you have to understand the difference between the vehicle’s Ex-Showroom price and its On-Road price. So, it's important to know the difference between Ex-Showroom and On-Road pricing and all the other components when it comes to buying new or used cars.

This article elaborates the differences and makes it simple to understand what you are purchasing and for how much!

What is Ex-Showroom Price?

• Ex-Showroom price is the cost of the car by excluding the additional charges such as the RTO (Regional Transport Office) registration, insurance, and road tax. 
• When you buy a vehicle, without paying the registry charges, road tax, and insurance, you will not be allowed to drive your new vehicle legally on the road.
• When these charges are unpaid and you continue to drive your car, you will be left with charges quite heavily. 
• Usually, a displayed car with the Ex-Showroom price attracts more customers. The Ex-Showroom price includes the Goods and Service Tax, the ex-factory cost, and the profit margin made by the dealership. 

What is On-Road Price?

• On-Road price is the cost you would pay to get a vehicle from the dealer or showroom onto the road.
• As discussed, it is illegal to drive a vehicle on the road if certain charges are not paid and that is exactly what On-Road pricing is.
• The price of cars including the Ex-Showroom price, road tax, registration charges, and insurance combined is the On-road price of that vehicle. 
• Several websites offer On-Road pricing calculators which makes it feasible to know approximately what you will be paying before you even get to the dealership.

Components for On-Road Price of Cars

• The prices are not constant as they could change with a change in taxes, fees, and other factors. The mandatory charges on a vehicle include the RTO registration fees, insurance, and road tax that have to be paid for all cars for them to be driven legally in the country. 
• The additional optional charges when buying a new car include any accessories for the vehicle, premium features or components, custom colors, or even an extended warranty. 
• Let’s take a closer look at some of the charges included in the On-Road price of a vehicle.

RTO Registration

• Registration is a must and should be the priority while buying a car or any vehicle for that matter. It is mandatory and will not legally be allowed to drive in the country.
• The dealership includes the RTO registration charges in the On-Road price, but you must confirm with them before leaving with the vehicle. 
• The charges for registering a vehicle depend on state laws and taxes. One can get a customized or fancy registration number by paying extra at the RTO or dealership.

Road Tax

• Road tax is paid to drive your car on the road. Road tax is paid for all the vehicles that board on the road. It's a legal way of driving your car on the roads of India.
• The road tax amount is a percentage calculated according to the Ex-Showroom price of the car or bike. The percentage of road tax is usually between 3 and 20 percent in the country and the tax is valid for anywhere between 10 and 15 years.

Insurance

• Insurance is one of the mandatory charges that are included in the On-Road price of a vehicle in India. It has been made mandatory by The Motor Vehicles Act and anyone who does not pay the insurance on their vehicle will have to pay a penalty. 
• It's up to customers to choose between Third-Party and Comprehensive insurance policies. The major difference between these two policies is that the Comprehensive policy offers “Own Damage” cover. 

Conclusion

Now you have got basic things to know about Ex-Showroom and On-Road pricing of a vehicle. Several factors separate the two and it is always better to understand the differences before you decide to buy a new car. To have a feasible purchase in a short period, please visit Kuwy.

Contact us via phone or email with any queries. Download the Kuwy app for further assistance.

Happy Learning!!