Why Car Prices Differs From City To City?
Car Prices – On Road Price & Ex-Showroom Price
Unlike day to day common products we use, cars don’t come with an MRP price tag. This is basically because the sales tax as well as road tax structure varies from state to state. Also, in some states and cities, the government levies octroi/entry taxes.
A Car is a dream purchase for most but with rising in prices of all commodities, it is becoming difficult day-by-day to turn this dream into reality. If you are well off financially then you can always opt for a brand new car with new technology and modern.
After a home, a car is typically the second most expensive purchase anyone makes and settling on a new vehicle is not a decision that one can take hastily. Price is a major deciding factor for most people as buying a car is one of the major investments in people’s lives.
But one might easily be fooled with the price tag placed on cars in showrooms, dealerships or website. The car price one views on websites are usually the one issued by the car manufacturer. But it is not the only charge that one has to pay. There are hidden costs that are applied over this price and the final purchase price of a car is usually termed as the on-road price.
The on road price of a car has various additional charges apart from the actual car price. The major components of on road price of a car include the ex-showroom price which is issued by the car manufacturer along with certain other costs such a state taxes, dealer margins, transportation and other excise taxes.
Other important components include the registration charges that one as to pay for procuring the registration certificate RTO, the insurance charges that one has to pay depending on the original car price that would cover all expenses in case of an accident and cess tax of 1% over the car price if you are purchasing a car that has a value greater than 10 lakh.
There are various online sites where you can check on road price of a car that you intend to purchase. The Indian Blue Book is one of the most trusted car purchase platforms and is guaranteed to provide you with the accurate car prices 2018.
The car price can be divided into two parts:
Ex-Showroom Price:
This is the price at which the car is yours (But you cannot drive in on the road). This price includes the dealer margin, transportation cost local and central taxes.
On Road Price:
As we told earlier, by paying the Ex-showroom price the car is yours, but you cannot drive it on the public road. For that, we need to pay the registration charges, road tax and insurance.
Why price varies from city to city?
- Transportation costs: This cost varies from city to city depending on how far your city is from the manufacturing plant.
- Local Tax: VAT and entry tax varies from state to state. Some cities and states levy entry tax for the car as well. This tax difference reflects the final rate of the car.
- Registration Charges and Lifetime Road Tax: These taxes levied by the RTO vary from state to state. All private vehicles registered in India have to give 15 years road tax in advance whereas cars registered as taxi need to pay tax for one year and can be renewed every year.
- Insurance Cost: The insurance cost depends on the company you use to choose to ensure your car with.
When you are zeroing onto a car, the price plays a major factor. Hence, it is important you know the On Road Price of your car before visiting the car showroom. You can get the On Road Price of the car of your choice and also check your car value before selling from IndianBlueBook.