Introduction
A very often confused term is "ex-showroom price" and "on-road price." It is because the purchase of vehicles is frequent in today's scenario. These days, searching for a four-wheeler or two-wheeler online is helped by various websites. Where they easily provides information about the cars, conditions, features, and most important price. The price of the vehicle is the most important thing. It affects the buying decision, and it becomes difficult to make a proper decision. The showroom offers us two' different prices for a single vehicle under the names ``on-road price" and "ex-showroom price."
Thus, researching and planning the dream vehicle is time taking. It can only be done when we understand the distinction between the showroom price and the on-road price. As an empowered buyers, we must be aware of all such details. We must know that various costs that are involved in the ex-showroom price and the on-road price. Also, the reason why the on-road price is known as the "on-road price" and why it is different from the ex-showroom price.
Ex-showroom price vs. On-road price
Both terms have their significance at different phases of vehicle purchase. We must understand that the ex-showroom price of any vehicle is lower than the on-road price of that vehicle. The On-road price is subject to some additional charges or the components that are involved in it. The price which the buyer pays to buy any vehicle from the showroom is the "on-road price," which is the final price. It is known that the ex-showroom price is not the final price of the vehicle. On-road price consists of the insurance charges, registration charges, and road taxes charged by the RTO.
Difference between the ex-showroom price and the on-road price in tabular form
| Parameters of comparison | Ex-showroom price | On road price |
| Meaning | The ex-showroom price of a vehicle is not the end price at which the consumer buys the vehicle. | The on-road price of the vehicle is the final price at which the consumer purchases it. |
| Payment made | The "ex-showroom price" is paid by the dealer to the manufacturer of the vehicle. | Dealers offer on-road prices to the customers when they receive any vehicle from the manufacturer. |
| Consists of | This ex-showroom price of the vehicle does not encompass any other cost as to registration, insurance charges for the vehicle, or RTO charges. | This price is that which is arrived at by including the cost of the registration, the insurance price of the vehicle, and the RTO charges. |
| Cost Comparison | It is less in comparison to the on-road price of the vehicle, and it consists of the total factory cost and the profit margin of the dealer. | The on-road price that is offered to the consumer is higher in comparison to the vehicle's ex-showroom price |
| Margin | This includes the manufacturers' profit. | This includes the dealer profit. |
| Example | If the ex-showroom price of vehicle "B" is 12 lakh it will be less in comparison to the on-road price. (This includes rates and taxes, which depend on different states.) | If the on-road price of a vehicle is Rs. 13.5 lakh, which is more than the vehicle's ex-showroom price (including RTO and insurance charges), |
What is the ex-showroom price?
In simplest terms, the "ex-showroom price" of any vehicle is the price at which the car dealers purchase or acquire the vehicle from various manufacturers to offer it in the market. The Ex-showroom price excludes the cost incurred on the registration, which is required to get done at the local RTO. Additionally, the ex-showroom price does not include the road tax and insurance cost of the vehicle, as these costs come into play when vehicles roll out of the dealership. All the mentioned costs are needed for legally driving a vehicle on the road. Dealers use this price to attract customers. These three important costs are included in the ex-showroom price and must be paid as these costs are non-negotiable. In cases of noncompliance, heavy fines are imposed.
The ex-showroom price, however, also includes the cost of the goods and service tax and the ex-factory cost incurred. As the showroom price is less than the on-road price, it is not the final price at which the vehicle is sold to the customer.
What is the on-road price?
The on-road price of any vehicle is the amount that a consumer pays to get the vehicle. This is the reason why this is called the "on-road price," as this price is paid for a vehicle that is ready to be used after paying all the required costs. This on-road price is a vehicle encompassing the ex-showroom price of the vehicle. In addition to this, it also includes the costs incurred for the registration, the road tax charges, and the cost paid for getting the vehicle insured.
The trend of getting a vehicle modified in aspects of its looks and features is also popular these days; it sometimes makes a lower-end vehicle a top-end vehicle. Every cost that is incurred for modification of the vehicle is also a part of the on-road price. The breakdown of the on-road price is easily available on the websites, and information can also be collected through the dealers.
Various components of the vehicles on the road are:
Road - tax: The road tax is the amount that is required to pay for legally using the vehicle on the road. This amount of road tax on any vehicle is charged based on the ex-showroom price of that vehicle. It is applicable at a certain percentage over the ex-showroom price. It generally varies in the range of 3 to 20 percent.
RTO charges: Once a vehicle is purchased, it must be registered with the RTO, and the cost of registration is mandatory to pay. It is a charge without which a vehicle cannot be used legally. Usually, the RTO cost is included in the on-road price of the vehicle. If a buyer opts to get a vehicle registration number of their choice, then they also need to pay a price for this to the RTO.
Insurance- cost: A vehicle owner must get his vehicle insured once it is purchased. The buyer becomes the owner of the vehicle after purchasing it. Also, it is an important component of the on-road price of a vehicle. Motor Vehicle Act has imposed fines on vehicle owners who do not get their vehicles insured. Overlooking this will impose heavy fines. A customer can opt for any insurance policy, and he has to pay the insurance cost for it. The buyers can opt for an insurance policy between a third party and a comprehensive plan.
Extended - Warranty: The electronic parts of the vehicles are covered by a warranty, it is applicable for 2 to 3 years. This is also known as the "standard warranty." However, a customer may opt to get an extended warranty, which helps the buyer get his vehicle insured for a few extra years. This cost of the extended warranty is a part of the on-road price. An extended warranty helps increase the resale value.
Extra Accessories and Modifications: Some endless modifications and accessories can be added to the vehicle to make it look more feature-loaded and increase its utility. There may be some essential accessories that are required for daily use, such as fog lights in the winter and seat covers to protect the seats, mats, glass coating, etc. Extra accessories cost a heavy amount for the vehicle owner. The costs which are paid for the modification of the vehicle are included in the on-road price of the vehicle.
Maintenance Package Cost: To make the driving experience better, the dealers of the vehicle offer various add-ons in the vehicle for the benefit of the customer. A few examples of add-ons are the annual maintenance packages. It also provides towing facilities to the vehicle owner in case of emergencies. These additional packages for the vehicle are optional, depending on the need of the customers.
Determining the best on-road price for the vehicle
As we know, various factors influence decision on the on-road price of the vehicle, and an increase or decrease in the factory-affecting cost influences the cost. The addition of some unnecessary factories will result in an unexpected price increase, which can be managed as customers have some degree of control over the on-road price of the vehicle. It is suggested that you listen to all the recommendations of the dealer but make decisions based on your wisdom and needs. Some buyers may opt for cheap insurance that does not include the claim for consumables such as Mobil, etc. Also, customers can choose fewer accessories, which will help keep the on-road price low. This information is suitable for any vehicle.
This is the best way to get the right price for your new 4-wheeler. In simple words, we must look at all those factors that effects the price. At the time of purchasing a vehicle, we should keep in mind all those factors, and based on that, we should negotiate rates.
Difference Between Ex-showroom Price and On-road Price in Points
The differences between the ex-showroom price and the on-road price are
- The ex-showroom cost of any vehicle is lower when we compare it with the on-road price of that vehicle.
- Whenever we buy a car and finance it through a bank, usually all private banks offer to finance up to 85% of the ex-showroom cost. On the other hand, the government banks provide up to 85% of the on-road price.
- As we know, anyone can opt for third-party insurance, or they may opt for a comprehensive policy. Whenever a complete policy is opted for, it increases the on-road price, but even after this, the ex-showroom price remains the same.
- The end price, or "ex-showroom price," of any vehicle is the price at which the consumer gets the vehicle. On the other hand, the on-road price is the end price of any vehicle.
- The price paid by the dealer of the vehicle to the manufacturer to get it for sale is the "ex-showroom price. The price at which a vehicle is provided to the customer is called the "on-road price."
- Various prices include the ex-showroom price and the on-road price. The ex-showroom price of a vehicle doesn't involve any other costs like registration, RTO, and insurance. The on-road price includes the cost of the RTO, insurance, and registration costs.
- The ex-showroom price of a vehicle consists of the profit margin of the manufacturer. But the on-road price includes the dealer's margin.
- To attract more customers, the company generally advertises the lesser price, which is the ex-showroom price, and it doesn't advertise the road price of the vehicle.
Conclusion
We hope this article will help you purchase your dream vehicle, as planning to buy a vehicle is a sophisticated task that starts with deciding on the vehicle and ends with negotiating the price. This task becomes even more complicated and sophisticated when we receive two different prices for the same vehicle. one under the heading of "on-road price" and the other under the heading of "ex-showroom price." So it is very important to understand the difference between the two. This article will help you understand the difference between the ex-showroom price and the on-road price of any vehicle. Various costs are included in the on-road price but not in the ex-showroom price of the vehicle. This article will also help to understand all these factors.
One more important aspect of this is understanding how the on-road price is calculated and how it can be controlled to fit into the consumer's budget.
This article also consists of aspects related to the type of insurance for which a consumer should opt to get the best on-road price for the vehicle. It is required to know, how to determine the best price for a vehicle. Because manufacturers and dealers always do not offer the most relevant price. That's why consumer is not willing to pay offered price to purchase a vehicle, but we have given this information and we hope that it will help you to determine the best price.
