When purchasing a vehicle, buyers often budget based on the advertised ex-showroom price, only to face an unexpected 15% to 25% addition when calculating the final on-road cost.

Components of On-Road Price

1. Ex-Showroom Price: Base manufacturing cost plus GST.
2. Road Tax & RTO Registration: State government tax (typically 6% to 14% depending on fuel type and engine capacity).
3. Vehicle Insurance: Mandatory 1-year comprehensive plus 3-year third-party coverage.
4. TCS (Tax Collected at Source): 1% on cars priced above ₹10 Lakh.
5. Dealer Handling / Fastag / Accessories: Optional add-on charges.

How It Impacts Loan Sanction

Most premier banks calculate their 85-90% LTV against the ex-showroom price, requiring the buyer to fund the entire RTO, insurance, and road tax out-of-pocket as part of the down payment.