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Purchasing Car With Car Loan- How Much Does It Cost You?

It is great to hear that you are looking to purchase your dream car. Wait! Are you prepared to handle all the expenses? Apart from having all the finances in place to purchase a car, you should be ready to handle many other related expenses. Knowing the different types of costs involved in the purchase of the car will not help you simplify cost calculations but also keep you away from tax surprises later.  Worried about applying for the car loan with the right lender? We are here to help you with every aspect of handling the car loan.  Let’s now understand the costs that are involved in the car invoice.

How to Assess Final Cost Of The Car?

Ex- showroom price

Most of the new car buyers misconceive this price as the final cost of the price move ahead to purchase the car. They come to know other costs involved in the car purchase only when they reach the dealer to close the price.  There are two types of cost involved in this term. One is the factory rate at which the manufacturer sells to the dealer and other is a cost which the dealer sells it to retail customers. The second ex-involves different costs like transportation, dealer margin, excise duty, state taxes and much more.

On road price

This is the final price you pay to the dealer to own your dream car. There are number costs that are involved in making up final price of the car. Let’s explore them further to understand it in a better way and plan for the car loan accordingly.  You will see these charges under the separate headings in the invoice of the car.  After looking them in detail, you will come to understand why there is a gap between the ex- showroom price and dealer price. Fortunately the car loans available today are ready to cover all these costs of you are going with an option of zero down payment.

Registration charges

As you know that there will be no vehicle in India without registration. This process creates a unique identity for the car with the help of the number. The charges for giving license for your vehicle to run on the roads depend on the model and make of car.

Road tax

The project of paving roads in a country is handled by the government and you have to pay tax to make your car run on the roads. The total tax should be paid at one shot, so, it is termed as lifetime road tax.  


Accessories is another important expense that you will incur after purchasing a car to make it look great. These expenses are not covered by car loan and it is important to showcase your negotiation skills to get the best bet.

Extended warranty

The car is an expensive luxury vehicle, it is important to go with the extended warranty when you purchase one. While some advice you do not go for it, getting it done will protect your vehicle and increase your resale value.


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