The Indian automobile market is crowded with car makers from all over the world including the indigenous car makers of the country and very naturally a wide variety of models are available belonging to different price categories are flooding the market. But what is the most extraordinary things about car prices in India is that the price of the same model made by the same company varies from cities to cities and there is of course some definite reason behind it.
Road tax
The cost of a car in India depends upon a number of factors like the actual car cost or the ex-showroom price, car insurance value and road tax. In India it is the state governments who are responsible for imposing road tax and depending upon the government rules and traffic regulations the rate of road tax can considerably vary from one state to another. That is the reason why cars come at a much cheaper price in cities and states like Delhi, Chandigarh and Haryana while in some other states like Karnataka and Maharashtra the road tax is considerably higher and the vehicles also do come at a much higher price.
Insurance rates
In India, though the same insurance policy is followed throughout the country the rate of insurance varies just as widely as the road tax from one region to another. This difference in rate of insurance influences the overall price of the car to a considerable extent and the price of the car can vary up to fifteen percent of the price in some other states in the country. The reason behind this different insurance rate in different parts of the land is due to the fact that in different areas the local conditions and traffic patterns are as diverse as the country itself is. The insurance rate also depends upon a few other factors like the local cost of the spare parts, type of traffic law enforcement and the cost of medical services too.
The insurance rate is also higher for densely populated urban areas and metropolitan cities as they are already congested with traffic and a new car naturally runs a higher risk of damages and accidents. The insurance rate of any new car is calculated based upon all these factors and that naturally results in the difference in car prices depending upon the model.
Excise duty
These are the reasons why car prices tend to vary from place to place throughout this vast country. This is true only for cars made in India and if somebody chooses to own a imported vehicle then there is some extra excise duty that he has to pay to the government and the amount of this duty depends on the actual price tag of the car. Though the road tax is levied by the respective state governments the excise duty for imported cars is levied by the central government which makes a major difference between the actual car price that is the ex-showroom price and the road price that the customer has to pay to have a vehicle for his own.
All these factors contribute to different car prices in India.