Why the Same Car Costs Differently Across Indian Cities: Understanding On-Road Pricing

VMPL
New Delhi [India], March 2: India's passenger vehicle market hit an all-time high of 4.3 million units in FY 2024-25, according to data from the Society of Indian Automobile Manufacturers (SIAM). With more Indians buying cars than ever before, a common point of confusion persists -- why does the same car cost significantly more in one city compared to another?
The answer lies in on-road pricing -- the actual amount a buyer pays at the dealership, which goes well beyond the advertised ex-showroom price. On-road pricing includes state-specific road tax, registration charges, insurance, TCS (Tax Collected at Source), and other applicable fees. Together, these components can create price differences of up to ₹1 lakh or more between cities for the exact same car variant.
How On-Road Price Is Calculated
The ex-showroom price is set by the manufacturer and remains largely uniform across a state. However, the moment road tax enters the equation, prices diverge sharply. Each state government sets its own road tax structure -- some use a flat percentage of the ex-showroom price, while others use slab-based systems where the rate increases with the vehicle's cost.
Registration charges, set by each state's Regional Transport Office (RTO), vary further. Insurance costs follow IRDAI guidelines but are influenced by the vehicle's Insured Declared Value (IDV), which is linked to the ex-showroom price in that state. Additionally, TCS of 1% applies to all vehicles priced above ₹10 lakh ex-showroom.
A Real-World Example: Hyundai Creta E Petrol Across Cities
To illustrate how significantly on-road prices can differ, consider the Hyundai Creta -- India's best-selling compact SUV. The base E Petrol variant carries an ex-showroom price of approximately ₹10.72-10.79 lakh across most cities. Yet the on-road price tells a very different story.
In Delhi, the Creta E Petrol starts at approximately ₹12.60 lakh on-road. Delhi's tiered road tax system charges 10% for petrol vehicles above ₹10 lakh ex-showroom, resulting in RTO charges of around ₹1.07 lakh for this variant. In Kolkata, the on-road price of the same variant lands around ₹12.50-12.79 lakh, benefiting from West Bengal's comparatively moderate road tax structure.
However, in Bangalore, the on-road price climbs to approximately ₹13.36 lakh -- nearly ₹76,000 more than Delhi -- primarily due to Karnataka's steeper registration and road tax charges. Hyderabad is even higher at approximately ₹13.51 lakh, a difference of over ₹90,000 compared to Delhi, driven by Telangana's road tax structure that can reach higher slabs for vehicles in this price bracket. Mumbai sits around ₹12.84 lakh, and Chennai comes in at approximately ₹12.88 lakh.
For the top-end Creta SX(O) Knight Diesel AT variant, priced at ₹20.20 lakh ex-showroom, these differences amplify considerably. The on-road price for this variant ranges from roughly ₹23.42 lakh in Kolkata to over ₹26 lakh in Hyderabad -- a gap of nearly ₹2.6 lakh for the identical vehicle.
Why Diesel Vehicles Pay More in Many States
A key factor that many buyers overlook is the differentiated road tax for diesel vehicles in states like Delhi. While petrol vehicles above ₹10 lakh attract 10% road tax in Delhi, diesel models in the same bracket are taxed at 12.5%. This surcharge compounds with the already higher ex-showroom price of diesel variants, making the on-road price gap between petrol and diesel wider than it appears on paper.
What This Means for Car Buyers
For a buyer choosing between cities -- or simply trying to budget accurately -- understanding on-road pricing is essential. The most practical approach is to compare the fully itemised on-road cost, not just the ex-showroom figure, before committing to a purchase.
With utility vehicles now accounting for 65% of all passenger vehicle sales in India (up from 60% just a year ago, per SIAM), and new model launches driving more first-time buyers into showrooms, transparency around on-road pricing has become critical. A buyer in Hyderabad budgeting based on an ex-showroom price alone could face an unpleasant surprise of ₹2-3 lakh at the dealership.
Platforms like MotoMotar -- an automotive research and pricing platform specialising in city-wise on-road car prices, detailed specifications, and variant-wise comparisons servicing car buyers across major Indian cities including Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Kolkata, Pune, and Ahmedabad -- are making this easier by tracking on-road pricing across all Indian cities with a component-by-component breakup covering ex-showroom price, RTO charges, insurance, TCS, and other fees for every variant. Buyers can check city-specific, variant-wise on-road prices for popular models including the Hyundai Creta, Maruti Suzuki Fronx, Hyundai Venue, and others to compare not just totals, but the exact reason why prices differ.
(ADVERTORIAL DISCLAIMER: The above press release has been provided by VMPL. ANI will not be responsible in any way for the content of the same.)