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Indian car market is growing progressively and is considered to be the fastest growing markets of the world. With the passage of time many new cars and introductions have entered the market and today the car market in the country is packed with a fleet of cars belonging to different segments.

In the midst of so many cars plying on roads what is most surprising is the fact that one particular car model differs in its price in various states of the country. The basic components of car prices in India are ex-factory price, ex-showroom price, and ex-road price.

Ex-factory price is the price at which a car manufacturer sells the particular car model to the dealer, ex-showroom price is the price at which a dealer sells the car, and ex-road price of the car is the price at which a car buyer drives away the car.

When a car dealer or seller provides an Indian car price quote to the buyer, he also adds other key components of car prices to the actual ex-showroom price of the particular car model. These key components are insurance, road tax, handling, logistics charges, et al. that differ from state to state and from dealer to dealer. New car prices India vary widely based on differences in road taxes across states.

Car insurance is mandatory in India but he rate of insurance differ from state to state. Different insurance companies offer different schemes and policies to suit a huge variety of consumers in the industry. These companies offer different policies depending on road condition, traffic patterns, local cost of car components, and actual cost of the car. Depending on these factors the policies differ from company to company and therefore one specified car model can have varied prices in different regions of the country.

Furthermore, road tax varies from state to state as it is controlled by the local or central government. Every car owner has to pay tax to the government to drive the car on road. The primary reason why the government asks for road tax is to have a better control on traffic flow. The imposed tax is subjected to the traffic regulation, government rules, and road condition of a specified state. It is believed that at present Karnataka Government imposes the highest road tax on automobiles.

Used cars prices India are also subject to the same rule of variation. When it comes to buying a used car the used car owner may already have paid the insurance for a specified annual and the road tax is paid only once. So, the used car buyer need to pay these extra charges but if in case the insurance policy has collapsed he or she has to pay for the used car insurance. If in case the buyer desires to take the used car to some other state then he or she also has to pay the road tax.