Are you planning to buy the car of your dreams? That’s great news! Congratulations. But hey, are you prepared to handle it? Apart from getting the finances in place, there are a lot of things you need to think about before actually going through with your decision. There are a couple of questions you need to ask before thinking about turning your dream into reality. The most important one? You need to know everything about different types of taxes you need to pay. It’ll not only simplify your money calculations but will also help avoid any unpleasant tax surprises later.
(Psst…have you applied for a Car Loan already? No? We can help with this too.)
Don’t worry! We’ll take you through all the costs that reflect on your car invoice. Worried about the down payment? Now’s when those Fixed Deposits can come in handy. Once you have a clear idea about each and every component that forms a part of the total cost of the vehicle, it’ll be easier for you to understand things. So, a typical car invoice will show you the following costs:
The Ex-showroom Price
There are a couple of ‘ex(s)’ involved in the price of a car. Let’s understand each of these, one by one. Ex-factory rate is what your car dealer pays to the manufacturer. Basically, the price at which the manufacturer sells the vehicle. Ex-showroom price, on the other hand, is the cost at which the car dealer sells the vehicle to retail customers. It includes a couple of things like transportation costs, dealer margins, excise duty, state taxes, octroi charges, etc. Phew! We know that sounds a bit complicated. But there’s more.
On Road Price
The final amount that you as a customer pay to the car dealer is the invoice value of the car or the on-road price. This invoice value is further broken into a couple of charges and you are likely to see these under separate headings on that car invoice. To simplify things for you and to make it easy for you to understand, let’s look at them one by one.
Registration Charges
When you buy a new vehicle, it’s mandatory to get it registered. It helps get a unique registration number for your vehicle, which serves as its unique identity. These charges vary according to the make and model of the vehicle. Getting a license plate for your vehicle is a part of the registration process.
Life Time Road Tax
Since you’re going to drive your vehicle on public roads, you need to pay some amount as tax for it. You basically pay the government for maintaining the roads for you and repairing them if need be. Since you pay it all at one shot, it’s called life time road tax.
Dealer Handling Charges
The price you pay the dealer for taking care of your car and getting it from the warehouse to the showroom is termed as the handling charges. These are also known as logistics charges. The basic things it covers include the basic fuel cost, car cleaning charges, number plate charges, and other such basics.
Standard Accessories
Depending on your needs, these accessories can vary. The good news? You can try your luck at bargaining and get yourself a great deal! In the end, it all boils down to your negotiation skills. Some of the essential standard accessories include mats, seat covers, audio system installation, mirror lock, steering grip lock, fog lights, tool kit, puncture kit, alloy wheels, car cover, etc.
Extended Warranty
Now some people might advise you to go ahead and get this extended warranty while others might advise you against it. As a result, there are high chances that you’ll find yourself stuck in a dilemma. Although it’s optional, we vote in favour of getting an extended warranty. Why? Here are the reasons:
- It helps protect your budget
Are you on a tight budget? Getting an extended warranty can be beneficial to you. This planned expense can protect you from all the other unplanned ones. It’s a machine after all. A lot of things could go wrong. Engine issues, electrical issues – all these can be very costly. Just one such expense is enough to wreck your monthly budget. Isn’t it better to get it all covered under that extended warranty instead?
Additional Reading: How To Maintain Your Car Without Spending A Dime
- No stress
Instead of letting the anxiety of unwanted and unexpected bills worry you, getting that extended warranty sure sounds like a better plan. It can help prevent all the inconvenience of unexpected breakdowns and reduce the financial burden. We know you already have a lot of daily things to worry about. Don’t add this stress to your list! With an extended coverage, all you have to do is dial a toll-free number and everything else will be taken care of. Your insurance provider will step in right there and handle everything for you. Sounds great, doesn’t it?
- Better resale value
No matter what, you need to think long-term. Later someday, you might think of selling your car. Why not plan accordingly? Getting an extended warranty cover can help you get better resale rates in the future. It just shows that your vehicle has been maintained properly and therefore, anyone willing to buy it is ready to pay more. Since your vehicle is in excellent condition, you get to quote a better amount. How cool is that? People looking for a used car are more likely to opt for a car with an extended warranty cover as compared to a vehicle that doesn’t have one. Think long-term, yo!
After reading all this, we’re sure those details on your car invoice won’t confuse you anymore. Now that you have a better idea of all the costs involved in buying a car, why not actually buy one?
Don’t worry! We have Car Loan offers specially designed for your needs.