Buying a car/vehicle is a milestone for many, but the process becomes confusing when understanding the prices. You must have wondered why the price you see at the store differs from the actual amount you pay. It is where you need to become familiar with the terms "ex-showroom price" and "on-road price".
Knowing the difference between these two will help you plan your budget accurately and make smart decisions. Plus, when you calculate the overall cost of your vehicle, aspects like car insurance also play a role. So, let's explore ex-showroom prices vs. on-road prices more and what they mean when you purchase your vehicle.
What does ex-showroom price mean?
Let's first decode the ex-showroom price of a vehicle. The word ex is often used in English to showcase something in its previous state. Similarly, ex-showroom price refers to the price of the vehicle before getting out of the showroom.
Now, this price roughly includes three main costs: the manufacturing cost of the vehicle, GST on the vehicle, and the seller's or dealer's profit margin. So, you can see that no road tax or any other cost is included in this price. Now, let's look at the price you, as a buyer, must pay when buying a vehicle.
What does on-road price mean?
On the other hand, the on-road price is the final price of a vehicle, which includes many more costs than the ex-showroom price. The main costs that increase on-road prices are registration, road tax, insurance, etc. Other than that, if you include any other accessory, it will also be included in the on-road price.
Ex-showroom price vs On-road price
The main difference between ex-showroom and on-road prices is what is included in both. So here are the main differences between ex-showroom vs on-road prices-
Ex-showroom prices
- The ex-showroom price is not the final price of the vehicle, as it does not include all the charges.
- It only includes the amount that the dealer pays to the manufacturers.
- The cost of registration, road tax, and insurance are not included in ex-showroom prices.
- It only includes the factory cost, the dealer's margin and taxes like GST.
On-road prices
- It is the final amount you need to pay and includes ex-showroom charges and other charges.
- You can use your car only after you have paid the on-road price, which includes the registration cost in your RTO.
- On-road prices include all the essential costs like registration, car insurance, and road tax. All these are necessary to pay to take your car home.
- People also buy extra vehicle accessories, like special GPS systems and number plates. So, these costs are also added to the on-road prices.
These additional costs are why on-road prices are always higher than the ex-showroom prices. So, you should focus more on the on-road cost of the vehicle to truly understand the amount you will be paying. Besides, it will also help you get more suitable car insurance.
How car insurance affects on road price
Car insurance significantly affects the on-road price of a vehicle, as it is a mandatory component of the total cost. When you buy a car, the on-road price includes insurance, alongside charges like registration and road tax. There are two primary types of car insurance: third-party car insurance and comprehensive insurance.
Car insurance significantly affects the on-road price of a vehicle as it is a mandatory component of the total cost. When you buy a car, the on-road price includes car insurance. So, here are the two types of car insurance that you can choose from -
- Third-party insurance
It is a legal requirement, and you cannot operate your car until you have third-party insurance. It is an affordable option and covers any damage to the third person in case you face an accident. So, it protects you from claims the third party can make because of the accident. Third-party insurance is always added to the on-road cost.
- Comprehensive insurance
This type of insurance offers broader coverage, protecting both you and any third parties involved. However, it is a relatively expensive option as it offers more coverage. As a result, it increases the on-road price of your vehicle.
Several other factors, like the type of car, its value, and your location, also affect the insurance premium.
Understanding the difference between ex-showroom and on-road prices will help you avoid unexpected costs. Moreover, you will be prepared for the amount you must pay. But don't forget that car insurance, especially third-party insurance, can influence your on-road price significantly. Hence, make smart choices using a car insurance calculator to estimate your premiums and plan your budget. Future Generali offers a range of insurance plans that you can personalise as per your requirements.
