Owning and purchasing a bike or a car is a decision most of us make by looking into many factors. It is not a small decision, and reversing it after purchase may be a costly affair. Therefore, before buying a vehicle it is important to be aware of the details that go while purchasing the vehicle. It is crucial to understand the difference between the ex-showroom price and the on-road price of a vehicle.
Ex-showroom price of a vehicle?
‘Ex’ stands for exclusive showroom price. This is the price at which you are buying the vehicle from the showroom. Ex-showroom price of a Car or Bike is the price at which the car dealer/ bike dealer sells the vehicle to the customer. It is calculated by adding the cost of the vehicle that is the factory price of the car or bike, the amount of seller profit, transportation charges from manufacturer to dealer, and other expenses the dealer bears.
Factors affecting the ex-showroom price of a vehicle:
Factors that influence the ex-showroom price are
- Factory price, dealer margin on the vehicle, and GST.
- The ex-showroom price may differ from one city to another.
Generally, the ex-showroom price is lower than the on-road price of the car or bike
On-road price of a vehicle
On-road price is the amount payable by the customer to bring the vehicle from the showroom to the road. It is thus the final selling price of a vehicle and the actual amount that the customer needs to pay to the vendor for buying a car or bike. On-road price includes RTO registration, road tax, insurance, accessories (mirror, crash guard, etc) an extended warranty, and other logistic charges which would be calculated over and above the ex-showroom price.
Factors affecting the on-road price of a vehicle:
Road tax
The tax that is paid by the car/bike owner to drive and use the vehicles on the road. It is compulsory and is applicable anywhere from 3% to 20% on the ex-showroom price. Road tax payment is valid for ten to fifteen years.
Registration charges
It is mandatory to get your bike/ car registered at the local Regional Transport Office before getting them on the roads. The dealer generally does this process and after this, you will get the license plate which has the registration number displayed as the number plate.
Insurance
In India insurance is mandatory for cars and bikes before driving on the road. You can get the insurance for your car/bike by yourself or from the vehicle dealer. On-road price may differ according to the type of insurance, its policy, and add-ons purchased by you.
Annual maintenance package
Every car/bike dealer will provide you with an annual maintenance package that includes services like cleaning, polishing, roadside assistance, etc. If your insurance policy covers the annual maintenance package or the roadside assistance package you don’t have to get this package from the dealer.
Tax collected at source
Your vehicle dealer will also charge 1% of the vehicle’s ex-showroom price as Tax Collected at Source.
Green Cess
This depends on the ex-showroom price of the car and may vary from state to state.
Extended Warranty
Vehicles come with a warranty period. But you can extend this warranty period by paying extra. These charges also get included in the on-road price. You can use this extended warranty as a benefit while you resell the vehicle.
Essential and Extra Accessories
On-road prices include the prices of the essential accessories for example seat covers, floor mats, and extra accessories like stylish biker jackets.
Handling charges
Transporting the car or bike from the factory to the dealer incurs a cost, that is included in the on-road price.
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