Difference Between Ex-Showroom and On-Road Price of a Car
Key Highlights:
- Ex-showroom price is generally what the manufacturers and dealers use for their advertising.
- On-road price is what matters to the buyers.
- Road tax and registration charges typically differ depending on the state/UT.
- By negotiating on the insurance premium, you can reduce the on-road price.
Ex-Showroom Price
The ex-showroom price of a vehicle is its base price, which includes production cost, manufacturers' & dealers' profit margins and the GST. This is the price that most dealers and manufacturers advertise. But it is not the final price you pay to own the vehicle.
Ex-Showroom Price = Production cost + Manufacturers' profit + Dealers' profit + GST
On-Road Price
The on-road price is the final amount you pay to take the car home and make it legally ready to drive on the road. It essentially includes the ex-showroom price of a vehicle, along with registration fees, road tax, insurance, FASTag charges, handling charges and optional add-ons like accessories, extended warranty package and other value-added services.
On-Road Price = Ex-showroom price + Registration + Road tax + Insurance + Handling charges + Optional extras
The on-road price of a vehicle is always higher than the ex-showroom price, and it can vary depending on the state, type of insurance and optional services chosen.
Ex-Showroom Price Vs. On-Road Price
| Aspect | Ex-Showroom Price | On-Road Price |
|---|---|---|
| What is it? | A base price of a vehicle, which most manufacturers advertise | The final price of a car to legally drive it on the roads |
| What does it include? | Production cost + Dealer & Manufacturers' profit + GST | Ex-showroom price + Registration fees + Road tax + Insurance + Handling charges + Optional add-ons |
| Legal For Road Use | No | Yes |
| Uniformity | Generally, the same across the nation (Minor variation across cities might be possible) | Varies by state, insurer, and optional add-ons |
Things To Remember When Buying A New Car
- Always ask for a detailed price breakup from the dealership to know what's included.
- It is worth noting that registration charges, road tax and insurance (third-party at least) are essential parts. Not adhering to these three compliances can attract heavy fines, seizure of the vehicle and even imprisonment in some cases.
- It is not necessary to buy the insurance only from the dealer. You can get your vehicle covered by other insurers outside the dealer or online and save some money.
- Handling charges are often negotiable.
- Road tax and registration charges vary by state. So, the final prices will differ.
- The central government, along with many state governments, offer various benefits on electric and hybrid vehicles in the form of subsidies, waiver of road tax and other aids. So, always check the official government websites of designated portals for the latest offer details before purchasing.
Why Knowing the Difference Matters?
Well, car brands continually advertise the ex-showroom price because it seems more attractive. However, it’s the on-road price that truly matters to buyers, as it reflects the actual amount you’ll pay out of pocket. So, before shortlisting your dream car, ensure you have the complete on-road estimate. Understanding the key components of these two price tags puts you in a better position and avoids surprises at the dealership.
FAQs
1. Can a car's on-road price vary across dealerships?
Yes, the car's on-road price may vary across dealerships as it depends on several factors like insurer, state tax charges, and optional add-ons.
2. Can I buy car insurance for a new car from outside the dealer?
Yes, you can buy the insurance for a new car from any insurer outside the dealership.
3. How can I estimate a car's on-road price before going to the showroom?
Use online calculators to find the approximate on-road price of a vehicle in your area.
4. Can we buy a car at an ex-showroom price?
No, you cannot buy a vehicle at an ex-showroom price. On-road price is what you need to pay to drive your car legally on the roads. This includes ex-showroom price, along with insurance coverage, registration charges, and road tax.
5. Can we negotiate on ex-showroom prices?
Well, the ex-showroom price is decided by the car manufacturer and is uniform across a city or state. Dealers in India are technically not authorised to change it. However, they can indirectly lower the price by offering discounts