The on-road price of a car is simple arithmetic: on-road = ex-showroom price + road tax + insurance + TCS (if above ₹10 lakh) + registration and statutory charges. Everything else on a dealer's quote — handling charges, logistics fees, mandatory accessory kits — is padding you can question, negotiate or outright refuse. The ex-showroom price is fixed across your state; it's the other lines that decide whether the same car costs you ₹11.2 lakh or ₹12 lakh. Here's every line decoded, with rates as of July 2026.
The same car, three cities: a worked example
Take a petrol car with an ex-showroom price of exactly ₹10,00,000 — roughly a top-end Tata Nexon. Here's what the legitimate on-road price looks like in three cities (rates as of July 2026):
| Line item | Delhi | Bengaluru | Mumbai |
|---|---|---|---|
| Ex-showroom price | ₹10,00,000 | ₹10,00,000 | ₹10,00,000 |
| Road tax | ₹70,000 (7%) | ₹1,40,000 (14%) | ₹1,10,000 (11%) |
| Cess on road tax | — | ₹15,400 (11% of tax) | — |
| Registration, HSRP, FASTag | ₹2,500 | ₹2,500 | ₹2,500 |
| Municipal/parking fee | ₹4,000 (MCD) | — | — |
| Insurance (1 yr OD + 3 yr TP) | ₹45,000 | ₹45,000 | ₹45,000 |
| TCS @ 1% | ₹0* | ₹0* | ₹0* |
| On-road price | ₹11,21,500 | ₹12,02,900 | ₹11,57,500 |
*TCS applies only when the ex-showroom value exceeds ₹10 lakh. At ₹10,00,001 it kicks in on the full amount — about ₹10,000 in every city.
Same car. Same factory. ₹81,400 more in Bengaluru than Delhi — and that gap widens sharply on pricier cars, as we'll see. You can check the exact figures for the Nexon in Delhi and the Nexon in Bengaluru on CarSahiHai, updated with current rates.
Line 1: Ex-showroom price
This is the manufacturer's listed price, and it already includes GST (28% on most cars) and compensation cess (1–22% depending on size, fuel and ground clearance). Nearly half your ex-showroom price is central tax before your state takes its cut. The ex-showroom price is uniform within a state and non-negotiable at the sticker level — but discounts off it (cash discount, exchange bonus, corporate discount) are absolutely negotiable, especially at month-end and before a model-year change.
Line 2: Road tax — the big variable
Road tax (formally, motor vehicle tax) is a one-time state levy, usually valid for 15 years, calculated as a percentage of the ex-showroom price. This single line explains almost all the city-to-city variation in on-road prices. As of July 2026:
- Karnataka is among the steepest: 13% on the cheapest cars, rising to 18% above ₹20 lakh — plus an 11% Infrastructure and Road Safety Cess calculated on the tax amount itself. Even EVs above ₹25 lakh now attract 10%.
- Kerala tops the country at up to 22%. Tamil Nadu runs 12–20% and Telangana 13–21%.
- Delhi is comparatively gentle: petrol cars pay roughly 4% (up to ₹6 lakh), 7% (₹6–10 lakh) and 10% (above ₹10 lakh); diesel pays more at each slab, up to about 12.5%. Under the Delhi EV Policy 2026 (effective 1 July 2026), electric cars up to ₹30 lakh pay zero road tax and no registration fee.
- Maharashtra charges petrol cars 11–13%, diesel 13–15% and CNG around 7%, with EVs fully exempt.
- At the other extreme, Himachal Pradesh, Puducherry and some union territories charge as little as 3–7%.
The pattern: southern states tax hardest, diesel is penalised almost everywhere, and EVs get full or partial exemptions in most states. If you're EV-shopping in Delhi, the road-tax line on your quote should read zero — if it doesn't, ask why.
Line 3: Insurance — mandatory, but not at the dealer's price
Law requires third-party (TP) cover — sold as a 3-year policy for new cars — and every sane buyer adds own-damage (OD) cover. What's not required is buying it from the dealer. Dealers typically quote insurance at full sticker premium because they earn commission on it; the identical comprehensive policy online or through an independent agent is routinely 20–40% cheaper, especially the OD component.
You have the legal right to bring your own policy. Some dealers resist because insurance margin is real money to them — stand firm, or use their quote as leverage: "match the online premium or I bring my own." Also scrutinise the add-ons pre-ticked into dealer policies (zero-dep, engine protect, consumables). Zero-depreciation is usually worth it on a new car; the rest, decide deliberately rather than by default.
Line 4: TCS — 1% above ₹10 lakh, and it's your money
Under Section 206C(1F) of the Income Tax Act, the dealer must collect 1% Tax Collected at Source if the car's value exceeds ₹10 lakh (the GST-inclusive ex-showroom value — the threshold and rate stand unchanged as of July 2026). On a ₹15 lakh car, that's ₹15,000 collected at billing.
Here's what dealers rarely explain: TCS is not a cost. It's deposited against your PAN, shows up in your Form 26AS, and you claim it as a credit when you file your income tax return — reducing your tax payable or coming back as a refund. It stings the wallet on delivery day but nets to zero. Verify the dealer has actually quoted your PAN correctly on the invoice, or the credit won't reach you.
Line 5: Registration and small statutory fees
Genuine government fees are modest: registration fee (about ₹600 for private cars), high-security registration plate (HSRP, roughly ₹600–1,100), FASTag (₹500), and hypothecation endorsement (₹1,500) if you've taken a loan. Delhi adds an MCD parking fee (₹2,000–4,000 by car size); Karnataka adds a small transport workers' welfare cess. All of these together should total a few thousand rupees. If the "RTO charges" line on your quote is ₹15,000 when the actual government fees are ₹3,000, the difference is dealer margin wearing a disguise.
Why the same car costs ₹1.5 lakh+ more in Bengaluru than Delhi
The gap compounds with price. Our ₹10 lakh example showed an ₹81,000 difference. Now run a ₹20 lakh diesel SUV: Delhi charges about 12.5% (₹2.5 lakh), while Karnataka charges 18% plus the 11% cess — effectively ~20%, or about ₹4 lakh. That's a ₹1.5 lakh difference on the identical car, before the dealer adds a rupee of padding. This is also why "which city should I register in?" is a real question for people with addresses in two states — though registering in a state where you don't genuinely reside to dodge tax is illegal and traceable. Compare real numbers yourself: Hyundai Creta on-road in Mumbai versus the same car in a southern city tells the story instantly.
What you can refuse: the padding lines
Now the lines that exist to widen the dealer's margin:
- Handling / logistics charges (₹5,000–50,000): Consumer courts have repeatedly held these illegal. A North Chennai consumer forum ruled that charging even a rupee beyond government-fixed registration fees is unfair trade practice and fined a Maruti dealer ₹1 lakh; the central government's 2012 circular directed dealers to stop, and RTOs in several states have told dealers to display "handling charges are illegal" boards. Dealers now rebrand the same fee as "logistics," "convenience" or "in-transit" charges. Refuse it. If they claim it covers transport from stockyard, point out that's already priced into the dealer margin built into ex-showroom.
- Mandatory accessory bundles (₹15,000–60,000): Mats, mud flaps, "3M treatment," seat covers bundled as compulsory. Nothing makes accessories mandatory. Take the car without the kit, or negotiate the kit free as part of the deal.
- Extended warranty: Often genuinely worthwhile — but it's optional, and manufacturer-backed extended warranties can usually be bought any time before the standard warranty expires. Don't let it be slipped in as a non-negotiable line.
- "Fastag recharge," "temporary registration," inflated "RTO agent fees": Ask for the government receipt for every statutory line. No receipt, no payment.
The dealer may claim "company policy" or refuse delivery without these charges. Your escalation path: ask for the refusal in writing (they won't give it), email the manufacturer's regional office (Maruti, Hyundai, Tata and Mahindra have all pulled up dealers over this), and mention the consumer forum. The word "consumer court" moves quotes faster than an hour of haggling.
Checklist: verify a dealer quote line by line
- Ex-showroom price — matches the manufacturer's published price for that exact variant and colour? Discounts recorded in writing on the quote, not verbally?
- Road tax — recompute it yourself: ex-showroom × your state's rate for your fuel type and price slab. Matches within a few hundred rupees?
- Insurance — get an online quote for the identical cover before you visit. Dealer within 10%? Fine. Otherwise bring your own policy.
- TCS — exactly 1% of ex-showroom, only if above ₹10 lakh, and your PAN on the invoice.
- Registration/statutory fees — ask for the fee schedule or receipts. Should be a few thousand rupees, not tens of thousands.
- Handling/logistics/any unnamed charge — strike it out. Cite the consumer court rulings if pushed.
- Accessories and extended warranty — listed as optional, priced individually, added only if you chose them.
- Grand total — matches the sum of the lines. Quotes with a total that doesn't reconcile are hiding something in rounding.
The fastest way to walk in prepared is to know the legitimate on-road number before the dealer prints one. CarSahiHai publishes every car's city-wise breakup across 20 cities — road tax, insurance estimate, TCS and statutory fees itemised. If your budget is where TCS doesn't even apply, start with the best cars under ₹10 lakh and keep every rupee of that 1% in your pocket on delivery day too.
A car quote is not a bill from the government. It's an opening offer from a business. Read every line like one.