what is on-road price means?

by | Jun 3, 2023 | FAQ

What on road price

Last Updated on June 3, 2023 by Ali

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what is on-road price means?

On-road price is a term used to describe the total cost of purchasing and owning a vehicle. It includes the ex-showroom price of the automobile and all other charges like registration fees, road tax, insurance, and any fees or charges that may be applicable. It is the final price that a buyer has to pay to drive the car out of the showroom. In this article, we will explore the concept of on-road price in detail with its components and the factors that affect it.

Components of On-Road Price

  1. Ex-Showroom Price: The ex-showroom price is the price of the vehicle without any additional charges, and it is the price that the manufacturer charges to the dealer for the car. It is also known as the factory price. The ex-showroom price varies depending on the make and model of the vehicle, as well as any additional features or options that include.
  2. Road Tax: A road tax is a fee the government imposes on cars by state-issued registrations. The amount of the road tax varies from state to state and depends on the vehicle’s engine size.
  3. Registration Fee: The government charges the registration cost to register the car in the buy. The registration fee also varies from state to state.
  4. Insurance: Insurance is a mandatory requirement for all vehicles in India. The cost of insurance affects by several variables, including the vehicle’s make and model, the driver’s age, and the buyer’s location. 
  5. Handling Charges: Handling charges are the fees charged by the dealer for handling and transporting the vehicle from the factory to the dealership.
  6. Extended Warranty: Extended warranty is an optional feature that a buyer can opt for to extend the warranty time of the car. The cost of an extended warranty varies depending on the make and model of the vehicle.
  7. Accessories: Accessories are additional features that a buyer can opt for, such as alloy wheels, a music system, and seat covers. The cost of accessories varies depending on the type and quality of the accessory.

Factors Affecting On-Road Price

  1. Make and Model of the Vehicle: The make and model of the vehicle is the primary factor that affects the on-road price. Luxury cars have a higher on-road price than economy cars.
  2. Location: The on-road price of a vehicle varies from state to state. State-by-state variations in the road tax and registration charge affect the vehicle’s total cost of ownership.
  3. Insurance: The cost of insurance depends on various factors, such as the age of the driver, location, and make and model of the vehicle. The insurance premium increases with the value of the automobile.
  4. Accessories: The cost of accessories varies depending on the type and quality of the accessory. The on-road pricing rises in direct proportion to the cost of the equipment.
  5. Exchange Bonus: Some dealers offer an exchange bonus when a buyer exchanges their old vehicle for a new one. The exchange bonus reduces the on-road price of the new car.
  6. Discounts and Offers: Manufacturers and dealers offer various discounts and offers throughout the year, which can significantly reduce the vehicle’s on-road price.

Advantages

  1. Transparency: The on-road price provides a clear understanding of the total cost of the vehicle, which helps buyers make informed decisions.
  2. Convenience: The on-road price includes all the charges, which saves the buyer from the hassle of paying multiple fees separately.
  3. Budgeting: The on-road price helps buyers plan their budget effectively and avoid unexpected expenses.
  4. Comparison: The on-road price enables buyers to compare the total cost of the vehicle across different models and makes.

Disadvantages

Cost

One of the main disadvantages of on-road prices is the cost. Some purchasers may find it challenging to afford a vehicle because the on-road price is typically higher than the ex-showroom price. The additional costs, which include handling fees, road tax, insurance, and registration fees, can quickly pile up and dramatically raise the price of the vehicle. For consumers on a tight budget, this may be a big drawback.

Lack of Customization

 Customers cannot alter the pricing to meet their needs because the on-road price already includes all applicable fees for the car. For instance, a purchaser might decide against choosing an extended warranty, but they are still required to pay for it as part of the on-road pricing. Customers who desire more control over the charges they are paying may find this lack of customization to be a drawback.

Location-Based Charges

The on-road price varies from state to state due to location-based charges such as road tax and registration fees. The fact that they must pay more for a similar vehicle than purchasers in states with lower costs is a disadvantage for buyers who reside in states with higher fees. Due to this, some purchasers may find it harder to afford the vehicle, resulting in a disparity between them.

Impact on Resale Value

The on-road price can also have an impact on the resale value of the vehicle. The resale cost of a car may be lower than the ex-showroom price because the on-road price includes expenses like registration fees and road tax, which not regards as parts of the vehicle’s value. Because they might not get a decent resale value for the car, this can be a disadvantage for buyers who intend to sell it in the future.

Limited Negotiation

The on-road price of a vehicle is fixed and includes all the charges that apply to the car. Due to the non-negotiable nature of the costs, buyers have little space for discussion. It may be a drawback for those who wish to haggle over the price of the car because their alternatives are constrained.

Conclusion

In the automobile business, the term “on-road price” is crucial since it clarifies the overall cost of vehicle ownership. It includes different charges such as road tax, registration fees, insurance, and handling charges.

While it offers numerous benefits like budgeting, transparency, and convenience, it also has some drawbacks as cost and lack of personalization, location-based fees, and effects on resale value. It also has limited bargaining options. Buyers should consider all the factors that affect the on-road price of a vehicle before making a purchase decision.

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Mansoor Ali, a Feature Writer, embarked on his journey five years ago with showroomex.com, fueled by his enthusiasm for cars. Starting as an eager journalist, he quickly became a seasoned professional, expanding his expertise to cover both bikes and cars. (Full Bio)