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When you go to buy a car or a two-wheeler, one of the major criteria is the price of the vehicle. The salesperson at the showroom would quote two prices—ex-showroom and on-road. The price you actually pay for the car is the on-road price, so you better look at that when making your decision. The on-road price exceeds the ex-showroom by around 10%, depending on the car model and the state in which you are buying it.

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Ex-showroom Price:

Ex-showroom price is the price which includes the manufacturer’s cost. The cost at which the car is manufactured at the facility along with the GST (Goods & Services Tax). The ex-showroom price also includes a bit of the dealer’s profit too. The ex-showroom price of your vehicle doesn’t include the registration charges, road tax and insurance.

On-Road Price:

1. Registration Charge:
This is the charge that relates to the cost that is incurred towards the registration of the purchased vehicle. As part of this, all vehicles that are purchased are registered by the Regional Transport Office (RTO) of the state where the buyer resides, and hence, they differ from state to state. Dealerships often also include the price of number plates, smart cards and other such costs as part of this, and once registered, your vehicle is given a registration number which has a state code (alphabetical), followed by an area code (numerical), then a series code (alphabetical) and ends with a four-digit number, all of which combines to give your vehicle a unique registration.

2. Road Tax:
This is a one-time tax that you need to pay to run your car in the Indian roads. The percentage of road tax is calculated on the ex-showroom price of the car and the range varies from 3% to 20%. The car dealers usually inflate the road tax in your bill stating that they will have to pay bribes or maybe a mediator fee.

3.Tax Collected at Source (TCS)
As part of a statutory procedure by the Government of India, dealerships charge TCS which is 1 per cent of the ex-showroom price, since June 2016. Vehicle buyers are given a certificate of the same upon collection which can be used at the time of filing their income taxes wherein this amount is credited back into their accounts.

4. Green Cess:
This is a fairly new addition to the total cost of the vehicle which was added by the Supreme Court after the temporary ban on diesel-engine powered vehicles with engine capacity of over 2000cc. This is applicable only on such vehicles and is 1 per cent of the ex-showroom price.

5. Insurance
Vehicle insurance is mandatory in order to have your vehicle be road legal and there are different types of insurances that the buyer can opt for, like Third-Party, Comprehensive and Zero-Depreciation. The cost of these insurances goes from being most accessible with the Third-Party insurance and costlier towards Zero-Depreciation insurance but all of them have their own set of advantages too, so make sure you know full well what you are paying for.

#Car #Bike #BuyingTips

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