What is the difference between ex-showroom and on-road price of vehicles, know the important reasons

New Delhi : Are you planning to buy a new car? When you have made the plan, then you must have shortlisted your favorite car. Apart from this, money must have also been arranged. But, the important information that you might not know yet is about the difference between the ex-showroom price and the on-road price. You will always see that when you go to the dealership of any vehicle manufacturing company to know the price of the vehicle, you will be told the ex-showroom price there. At the same time, if you place an order to buy a car, then the on-road price becomes something different. There is a lot of difference between these two amounts. Have you ever tried to understand the difference between these two prices? If you have not tried to understand the difference between ex-showroom price and on-road price before buying a car or any vehicle, then let us know you.

What is the ex-showroom price?

According to a report by ICICI Lombard, in simple words, ex-showroom price is the price at which dealers buy the car from the manufacturer. Vehicle registration charges are not included in this price. The registration fee is decided by the local RTO (regional transport office). Additionally, the ex-showroom price also does not include road tax and insurance costs. Let us tell you that there cannot be any compromise on registration, road tax and insurance for buying or driving a car in India. Non-compliance with these three compliances can result in heavy fines and even imprisonment. These costs are not included in the ex-showroom price. The ex-showroom price includes the factory cost of the vehicle, Goods and Services Tax (GST), and the vehicle dealer’s profit margin. However, you will have to pay extra for optional accessories. The ex-showroom price of a vehicle is the advertised price.

What is the on-road price?

  • On-road price is the final amount you pay to get the road-for-road vehicle from your dealer.

  • On-road price includes ex-showroom price, vehicle registration cost, road tax and insurance cost.

  • If you want additional features and accessories, it is included in the on-road price of the vehicle.

  • You can check the difference between the ex-showroom price and on-road price by using the online calculator or by contacting the dealer.

vehicle registration charge

Whether you buy a bike or a car, it is necessary to register it in the Regional Transport Office (RTO). Usually the dealer from whom you buy the car. The dealer includes this expense in the final price of the vehicle i.e. on-road price. The thing to note is that the vehicle registration charge varies in different states. Also, if you want a special VIP number for your vehicle, the registration charge also increases.

road tax

When you drive on Indian roads, you have to pay road tax. However, this is a component of the on-road price. It is calculated on the basis of ex-showroom price. Typically, this is a percentage of the ex-showroom price, which ranges between 2 to 3 percent. Road tax once paid remains valid for 10-15 years.

tax collected at source

The dealer levies tax at 1 percent of the ex-showroom price of the vehicle. This is called tax collected at source.

Annual Maintenance Charge

Many vehicle dealers offer annual maintenance packages, which include services like vehicle cleaning, polishing, roadside assistance and more. If you opt for this package, the on-road price will increase further.

cost of essential goods

Some accessories like floor mats and seat covers are essential. You can purchase these essential accessories from your vehicle dealer or you can choose to buy them separately. If you buy these from your vehicle dealer, their cost will be included in the on-road price.

Cost of Accessories

There are some important accessories in vehicles, which you choose to enhance the features or efficiency of your car or bike. It may also happen that you want to buy a trendy helmet for your bike or install a GPS navigation tool in your car. Adding these additional accessories to your shopping list will increase the final on-road price of your vehicle.


All vehicles come with a fixed warranty provided by the vehicle manufacturer. It is fixed for a fixed time. However, you can extend this warranty by paying some additional charges. This additional charge is included in the on-road price of the vehicle.

Green Cess

Following the ban on diesel vehicles in Delhi-NCR, the Supreme Court issued a mandatory cess called Green Cess, which is levied on the ex-showroom price of the vehicle. Cess varies from state to state and is decided by the government. This is subject to change as per the policy decision of the government.


As per the Motor Vehicles Act, you cannot drive your vehicle on the roads without valid motor insurance. You must have at least third party insurance. Usually, dealers have tie-ups with insurance companies and they arrange it for you or you can insure your vehicles yourself. However, if you get your vehicle insured from your dealer, obviously the cost will be added to the on-road price of the vehicle. Therefore there is a difference between the ex-showroom price and the on-road price.