How To Calculate On Road Price of a Bike?

It's a Sunday afternoon, you are relaxing on your couch enjoying a good game of cricket and in between the overs, an ad of the newest and the most popular bike is shown. Being a bike lover yourself and planning to own one after your savings finally cross a certain threshold, you believe that with the help of a two wheeler loan you can own the bike of your choice. So, you watch till the end to find out the price of the vehicle. Next, you browse for the same bike over the internet, you review the specs, ask around in your friends' circle and finally use a bike loan calculator to calculate the EMI you would be paying each month. Sensing the EMI is well within your monthly budget, you finally go to the showroom to check the bike, get a test drive and purchase it. But, this is when you realize that your bike is slightly overpriced than what you saw in the ad or during your web analysis. This is because of on-Road pricing.

Types of Pricing

Every vehicle has two kinds of pricing:

• Ex-Factory Price
  
• Ex-Showroom Price
  
• On-Road Price
  

An ex-factory price is lesser known to the public as this is the price at which a dealer buys a vehicle from the manufacturer.

An ex-showroom price is a price at which the dealer sells a vehicle to a customer. This excludes charges for registration and insurance. Moreover, this is the price that is normally used in the marketing of the vehicle and is usually shown in advertisements, as well as on the websites that specialize in vehicle specifications.

On the other hand, the on-road price is something that customer pays to get the vehicle making it the final payable amount. The on-road price is determined by factors like the model of a bike, the state from where you bought the bike, insurance coverage premium, etc.

Calculation of On-Road Price

In view of this, if you are purchasing a two-wheeler, you should always be aware of the on-road price as this determines how much you need to spend on the vehicle. As mentioned earlier, the on-road price depends on other components which are:

• Registration Charges
  
• Insurance Premium
  
• Lifetime Road Tax
  

Registration Charges

The registration of a vehicle is the process of assigning the vehicle registration number as per the state in which you are registering the vehicle. Hence, the registration charges would vary according to your state. Also, registration in a union territory like Delhi costs you much less than in a state like Gujarat. 

In general, registration charges would vary from 3% to 13% of the ex-showroom price. This is a one-time charge as long as you don't re-register your bike.

Insurance Premium

As per law, any vehicle that is used on Indian roads needs to be insured against physical damages. The insurance premium also varies according to the insurance providers. There are a variety of insurance providers both in public and private domains. The insurance premium charges may change annually and also depend on the maximum coverage you can get for any physical damage. 

Ideally, the charges would be around 2% to 3% of the ex-showroom price. Please note that this is an annual premium and needs to be paid once in a year.

Lifetime Road Tax

This is the tax paid to the government to maintain the roads we use and is again dependent on the state in which your vehicle belongs. Also, according to the state you reside in, the road tax may vary anywhere from 5% - 15% of the ex-showroom price. This is also a one-time charge and need not be paid again unless the vehicle is re-registered in another state.

If you are planning to buy a bike and you have already found the ex-showroom price, the on-road price would generally be at least 10% higher than the ex-showroom price and depending on a variety of factors this would amount to even more. So, the next time when you see the bike of your dreams and think that it's well within your budget, think again.