Indian car buyers look for a vehicle that fits within their budgets and fulfills their needs. You might not know but small cars like Alto With 17,389 units sold in October 2021 became one of the most selling cars of India in October 2021. The process of choosing the right variant and getting the car is long. Often, a long list of costs and prices are given during the paperwork of a car. These prices are often noted as ‘On-road price’ and ‘Ex-showroom price’.
A typical scenario is that the ‘ex-showroom price’ fits within our budget, while the ‘on-road price’ surpasses our budget, causing us to reconsider.
Here we explain the terms ‘On-Road Price’ and how to lower them:
- How does ‘On-Road Price’ work?
- How much does it include?
- In India, what factors affect on-road prices?
- How can it be calculated?
- What causes the difference between the cities?
How does ‘On-Road Price’ work?
When you buy a new car, the On-Road price or OTR price is the total cost of the car. Invoices are the bills your car has before it is registered, the total amount. This term refers to the basic price of the vehicle at the showroom excluding additional mandatory costs, such as insurance and taxes. In a city/state or country, the ‘ex-showroom price’ is set by the manufacturer.
However, the ‘on-road price’ is determined by the configuration of the vehicle, add-ons, and discounts. The best thing is that now with the availability of tools like OBV you can check on-road price within just a few seconds.
Also, the cost percentages of taxes, registration fees, and other fees vary according to the car you get. Vehicles are always more expensive on the road than in showrooms.
How much does it include?
In addition to the ‘ex-showroom price’, all the costs listed below.
- Among these are your insurance, RTO fees, road tax, TCS charges (for cars priced above Rs 10 lakhs ex-showroom), green cess (for above 2000cc cars), handling charges, and other add-ons that you choose, such as a GPS navigation system.
- Insurance with no depreciation
- A warranty extension
- Annual maintenance package
- Accessory components
- The Fast Tag
There is a 15% price difference between the on-road and showroom prices. Additionally, the discount on the vehicle and the location of its manufacture will play a role. In general, vehicles coming from the CBU route (Completely Built-Up Units) are taxed higher than vehicles that are coming from the CKD route (Completely Knocked Down Units).
In India, what factors affect on-road prices?
Taxes contribute significantly to the cost of a car.
- Optional Add-Ons – There are several options that can result in a significant increase in your OTR price. Dealers today offer a long list of accessories and additional equipment which includes door visors, roof rails, bumper protectors, chrome-kits, seat covers, and much more.
These factors increase your on-road price.
- Registration fees– When buying a new car in India, as well as around the world, many people are fond of receiving their lucky set of numbers. RTO costs can rise at a 6 digit figure just by choosing a registration number. Registration numbers are allocated by auction.
What causes the prices of cars to vary between cities?
- It’s the ex-showroom prices that determine the on-road prices. ‘Ex-showroom price’ determines the percentage of taxes and charges. Whenever the ‘ex-showroom’ price increases, the ‘OTR’ price increases as well.
- Depending on the region where the car is being sold, the price differs greatly. Tax rates vary by state. Consequently, cars cost less in Union territories due to lower road tax and other major tax prices.
- Many high-end luxury vehicles and supercars have license plates beginning with ‘PY’ and ‘NL’. Registration costs in the top tier cities are comparatively more expensive than in the middle and lower tiers.
- Transportation charges also play a significant role in pricing
Also Read: Getting your Accident Claims
Since we have already seen what are the major factors affecting the ”On road price of your car”. You should choose wisely what to opt for and what not. Before purchasing a car or bike, seek answers to specific questions by contacting the vehicle dealer.