Ex-Showroom Price vs On-Road Price: Understanding the Differences

What is Ex-Showroom Price?

The Ex-Showroom Price is the price at which the vehicle is sold to the dealer by the manufacturer. It is the price of the vehicle as it leaves the factory, and it does not include any additional costs, charges, or taxes that adds to the vehicle as it is sold. This price is typically advertised in the dealership. Following are the factors that includes in Ex-Showroom Price:

• Vehicle Price: The base price of the vehicle.
• GST (Goods and Service Tax): This is included at the time of the purchase from the manufacturer.
• Manufacturer’s Warranty: Any factory-related warranty is included in this price that is provided by the manufacturer.
• Profit Margin: The profit margin of the dealership is also added in this pricing.

What is On-Road Price?

On-Road Price is the final price of the vehicle after adding all the additional costs required to bring the vehicle from the dealership to the road. It is the final price that you will need to pay in order to own the vehicle. This price may vary from location to location, and account in several factors such as:

• Optional Factors: These include essential accessories, extra accessories, warranty extensions, servicing packages, etc.
• Essential Factors: These include Ex-showroom price, insurance, road tax, registration charges, handling charges, etc.

Key Differences Between Ex-Showroom Price and On-Road Price

The Ex-Showroom price is basically the starting price of the vehicle exiting from the factory, whereas On-Road price can be said as the ending point or the final price of the vehicle. Here’s a table highlighting the key differences between the two prices:

For Example: If a vehicle’s Ex-Showroom Price is around ₹5,00,000 the price that the customer will pay should be around ₹6,00,000 that will include road tax, registration fees, insurance, handling charges,etc. (Note: Prices may vary from state to state).

Additional Components for New Vehicle (On-road Price Factors)

When calculating the On-Road Price, various factors like road tax, registration fees, insurance, servicing charges, etc.are added to the Ex-Showroom price of the vehicle in order to make the vehicle suitable and legal for use on public roads. These components or factors cost vary from location to location, dealership’s polices and vehicle’s model. Here's a table to better understand the different components affecting the On-Road Price.

Prices of these components may vary while buying from different states. Please check what the fees are in your state and budget accordingly.

How to get an effective On-Road Price?

Understanding On-Road Price and its breakdowns is essential in making an informed decision whilst purchasing a vehicle. As there are several additional costs added to the Ex-Showroom Price you should have a keen eye and opt for all the necessary costs only. These additional costs can very easily disrupt your budget if not planned strategically. Here are a few tips and look outs to ensure getting an effective On-Road Price.

• Negotiations: Mostly, all of these additional costs can be negotiated with the dealership. Be it the Ex-Showroom Price, the add-on accessories, or the extended warranty, most of these components are negotiable and their prices vary depending on the demand and supply of the components.

• Add-On Accessories: As fancy as they seem, many of these accessories add significantly to the On-Road Price of the vehicle. While some accessories can be essential, most of them are purely optional. Choose these accessories according to your needs and liking as they do add up to the cost of On-Road Price.

• Government Schemes and Tax Benefits: The government may offer some tax benefits or rebates in some cases on purchases of vehicles, mainly on eco or environment friendly ones. These can be specially seen in the case of EVs (Electrical Vehicles).

• Registration Charges: Although registration charges are a non-optional, essential expense, it can be lowered by not opting for fancy or luxurious number plates. These fancy number plates may cost a fortune and can be avoided if not necessary.

• Discounts and Seasonal Offers: Sales and discounts are pretty frequent amongst dealerships. These dealerships offer discounts from time to time and also advertise these discounts to purchase vehicles from their showrooms. Alongside dealership discounts, seasonal offers also come from time to time. One such example is during “Dhanteras” when most new vehicle purchases are made, many dealerships offer hefty discounts.

• Extended warranties and servicings: Purchasing extended warranty may sound like a good idea, but only if it's actually useful to you. These warranties will be restrictive to time and distance covered. If your vehicle is going to run everyday and would be covering lots of kms, then opting for extended warranty is justified. Similarly, a vehicle that runs daily and goes through bad or rough roads on a regular basis requires servicing more often. If your vehicle comes under such circumstances only then it is viable to go for extended warranty and servicings or else you can save on this expense.

• Insurance: Insurance can be bought from a third party or directly from the dealership. Regardless of where you buy it, choosing the right insurance policy for your vehicle will not only save you money on the premium, but also will help you in the time of need (claims). For example, For a luxury vehicle, a comprehensive insurance policy is recommended, while a basic one is optimum for a standard vehicle. On the other hand adding a passenger cover to your vehicle when you know you will be driving alone most of the time is not optimum.

Key Takeaways

Ex-Showroom Price is the initial cost at which dealerships advertise their vehicles, whereas On-Road Price is the final cost that the customer will pay in order to own the vehicle. Understanding On-road Price will help you in properly budgeting for your car and make an informed purchasing decision. After you do your research and complete your purchase, drive away with satisfaction with your cost-effective purchase.

Key Takeaways to ensure the safety and protection of your valuable asset, having the right insurance coverage is extremely crucial. Don't leave your prized possession to uncertain events - explore the best car insurance options that will keep you and your vehicle protected.

Frequently Asked Questions