On-Road Price Explained: What Is in a Car's On-Road Price in India?

The on-road price explained simply: it is the ex-showroom price plus everything needed to legally drive the car on the road. That usually means road tax, registration fees, insurance, TCS (1% on cars above ₹10 lakh, which you can claim back in your income tax), a FASTag, and sometimes charges like extended warranty, accessories or handling fees. In most states, the on-road price is 10–25% higher than the ex-showroom price. Some items are mandatory and fixed; others are negotiable or optional.

Here is every line on a typical dealer quote, what it means and whether you can reduce it.

A typical on-road quote

Here is an example for a ₹10.5 lakh (ex-showroom) petrol SUV in Maharashtra:

Ex-showroom price

The ex-showroom price is the car’s price including GST, as set by the manufacturer for that city. Since September 2025, small cars carry 18% GST and larger cars 40%, with no separate cess. Our GST on cars guide explains the rules.

Can you reduce it? Yes, through discounts, which are shown as a reduction from the ex-showroom price or as separate benefits. Festive and year-end periods usually bring the best offers. See our guide to the best time to buy a car.

Road tax

The largest add-on. It is a percentage of the ex-showroom price set by your state, usually covering 15 years. Rates range from about 6% to over 20%. Our road tax by state guide lists current slabs.

Can you reduce it? Not by negotiation. You can only reduce it by choosing an EV in a state with exemptions, picking a variant below a slab boundary, or using BH series if eligible.

Registration and number plate

The RTO charges a registration fee, smart card fee for the RC, and the cost of High Security Registration Plates (HSRP). These are fixed and relatively small.

Insurance

Insurance is mandatory: at least third-party cover, but almost everyone buys comprehensive cover for a new car. New cars usually come with multi-year third-party cover and one-year own-damage cover.

Can you reduce it? Yes, often significantly. You are not obliged to buy insurance from the dealer. Compare online quotes from several insurers and provide the policy to the dealer before registration. Choose add-ons carefully. Our zero depreciation insurance guide explains which add-ons are worth it.

TCS (Tax Collected at Source)

For cars priced above ₹10 lakh, the dealer collects 1% TCS. This is not an extra tax. It appears in your Form 26AS and can be claimed against your income tax liability when you file your return.

FASTag

A FASTag is mandatory for paying tolls on national highways. It costs a few hundred rupees. You can also buy the FASTag annual pass separately; see our FASTag annual pass guide.

Extended warranty

Optional. Extends the manufacturer’s warranty by a few years. Worth considering if you keep cars for a long time, especially automatics and cars with lots of electronics.

Can you reduce it? Sometimes. Ask whether the price is fixed by the manufacturer or whether the dealer offers it at a discount.

Accessories

Dealers often add accessory packs, sometimes presented as mandatory. They are not.

Can you reduce it? Yes. Buy only what you want. Many accessories are cheaper at authorised accessory stores or online.

Handling, logistics and other charges

Some dealers add “handling”, “logistics” or “PDI” charges. Many transport authorities have said such charges should not be collected separately from the ex-showroom price. If you see them, ask exactly what they cover and ask for them to be removed.

Worked example: cutting the on-road price

A buyer in Pune receives a quote of ₹13 lakh on-road for a ₹10.5 lakh SUV.

1. Insurance: dealer quote ₹48,000; online quote with the same add-ons ₹38,000. Saving ₹10,000.
2. Accessories: dealer pack ₹35,000; buyer keeps only mats and mud flaps for ₹6,000. Saving ₹29,000.
3. Handling charge: ₹8,000 removed after the buyer asks.
4. Festive cash discount: ₹20,000.

New on-road total: about ₹12.33 lakh, a saving of about ₹67,000. Use our on-road price calculator to estimate your own.

How to read and question a quote

1. Ask for a written, itemised quote for the exact variant and colour.
2. Check each item against the table above.
3. Ask which items are mandatory and which are optional.
4. Compare insurance separately.
5. Get quotes from at least two dealers.
6. Confirm the final price in writing before paying the booking amount.

Financing and the on-road price

Most banks lend up to 80–90% of the on-road price, some up to 100% for certain customers. A larger down payment reduces your EMI and total interest. Our car loan interest rates guide explains how to compare loans, and our car EMI calculator shows the effect of different down payments.

Common mistakes

• Comparing ex-showroom prices across dealers or states instead of on-road prices.
• Accepting insurance and accessories as part of the “package” without comparing.
• Paying handling charges without questioning them.
• Forgetting that TCS is claimable.
• Not reading the final invoice before paying.

Registration process in brief

After you pay, the dealer handles most of the registration process on your behalf:

1. The dealer submits your documents (address proof, PAN, Form 20 and the insurance policy) to the RTO through the Vahan portal.
2. Road tax and registration fees are paid online.
3. A temporary registration may be issued if the permanent number takes time.
4. The permanent registration number is allotted and the High Security Registration Plates are fitted.
5. The registration certificate is issued, often as a smart card, and is also available digitally through DigiLocker and mParivahan.

Ask the dealer for copies of every receipt: road tax, registration and insurance. You will need them for future insurance claims, resale and any tax refunds if you move states.

Choice numbers (VIP numbers)

If you want a specific registration number, most states allow you to bid for or buy a “choice number” through the RTO for an extra fee. Popular numbers can cost thousands or even lakhs in auctions. This is optional and entirely separate from the standard registration fee.

On-road price for EVs

For electric cars, the on-road price is often much closer to the ex-showroom price because many states waive road tax and registration fees. GST on EVs is also only 5%. A ₹15 lakh EV in a state with a full exemption might cost only about ₹16 lakh on-road, while a ₹15 lakh petrol SUV in the same state might cost ₹17.5 lakh or more. See our EV road tax and subsidy guide.

Delivery-day checks

Before you drive away, check that the invoice matches the agreed on-road price, that the insurance policy shows the correct car and add-ons, and that the car itself has no damage. Our new car PDI checklist walks you through inspecting the car before accepting it.

Loyalty, exchange and corporate benefits

Many quotes show extra “benefits” that reduce the on-road price only if you qualify:

• Exchange bonus: an extra amount if you trade in an old car. Compare the total you get for the old car (valuation plus bonus) with what an independent buyer would pay.
• Loyalty bonus: for existing owners of the same brand.
• Corporate discount: for employees of listed companies or government departments. You will need an ID card or letter.
• Scrappage benefit: if you scrap an old vehicle and show the certificate of deposit.

Ask the dealer to show the price with and without each benefit so you know exactly what you are paying.

Paying the booking amount safely

Pay the booking amount only to the dealer’s official bank account or at the showroom, and always get a receipt. Check the refund policy in writing. Avoid paying cash to individual salespeople or through personal accounts.

Final invoice check

Before paying the balance, compare the final invoice with your agreed quote line by line. Check the chassis and engine numbers on the invoice against the car itself. Mistakes are easier to fix before delivery than after registration.

Sample questions to ask the salesperson

• “Which items on this quote are optional?”
• “Can I buy insurance elsewhere and still register through you?”
• “What exactly does the handling charge cover?”
• “Is this price valid until delivery, or can it change?”
• “Which benefits apply to me, and which need an exchange or corporate ID?”

Clear answers to these five questions usually reveal where you can save money.

Write the answers down, or ask the salesperson to email them. A written record makes it much easier to compare dealers and to hold everyone to what was promised on delivery day.

Summary

The on-road price is the ex-showroom price plus road tax, registration, insurance, TCS (if above ₹10 lakh), FASTag and optional extras. Road tax is the largest and fixed; insurance and accessories are where you can save the most. Always get an itemised quote, compare insurance separately and push back on unexplained charges. For more money-saving guides, visit our ownership section.

Prices are ex-showroom unless we say otherwise, and makers change them often. Confirm the latest price, offers and variant details with an authorised dealer before you book.