On-road Car Price Explained
Ex-showroom, GST, road tax, registration, insurance, TCS and add-ons — what you actually pay and what the loan covers.
Updated 30 September 2026 · 8 lenders trackedWhat you need to know
The on-road price is the ex-showroom price plus road tax and registration (set by each state), first-year insurance, 1% TCS on cars above ₹10 lakh and any accessories or extended warranty you choose. Road tax differs widely between states, so the same car can cost noticeably more in one state than another.
Worked example
| Component | How it is charged | Example |
|---|---|---|
| Ex-showroom price | Includes GST (18% or 40% by car size, 5% for EVs) | ₹10,50,000 |
| Road tax + registration | Set by the state — often a percentage of ex-showroom that rises with price and fuel type (assumed 10% here) | ₹1,05,000 |
| Insurance (year 1) | Comprehensive own-damage + mandatory 3-year third-party cover for new cars (assumed) | ₹45,000 |
| TCS @ 1% | Only if price exceeds ₹10 lakh (Sec 206C(1F)); claimable against your tax | ₹10,500 |
| Accessories, FASTag, extended warranty | Optional — negotiate or skip (assumed) | ₹15,000 |
| On-road price | ₹12,25,500 |
Illustrative figures for a car with an ex-showroom price of ₹10,50,000; road tax and insurance are assumptions — your state’s road-tax slab and insurer quote decide the real numbers. At 80% funding of this on-road price the loan would be ₹9,80,400. On-road price guide →
GST 2.0 on cars (from 22 Sep 2025)
| Category | GST |
|---|---|
| Small cars (petrol up to 1,200 cc, diesel up to 1,500 cc, length up to 4 m) | 18% |
| Larger cars and SUVs | 40% |
| Electric cars | 5% |
| Compensation cess | Removed |
Ways to lower the on-road price
- Buy insurance from the market instead of the dealer’s default quote (the policy must still name the bank)
- Skip bundled accessories, coatings and “handling charges”
- Check state EV road-tax waivers
- Claim the TCS back through your income tax return
Frequently asked questions
Does the car loan cover road tax and insurance?
Banks that fund “on-road price” include them; others fund only a share of ex-showroom, leaving these to your down payment.
Is TCS an extra cost?
No — it is tax collected in advance against your PAN and can be adjusted or refunded when you file your return.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.