Why does the same car cost differently in different states?

The main reason lies in how the on-road price is calculated. The ex-showroom price, which is set by the manufacturer, is largely similar across locations. However, the final amount paid by a buyer includes several additional charges. These typically include state road tax, registration fees charged by the Regional Transport Office (RTO), insurance costs, and Tax Collected at Source (TCS) where applicable. When these elements are combined, the price difference between cities can easily reach Rs 1 lakh or more for the same car variant.

Road tax plays the biggest role in this variation because it is determined by individual state governments. Some states apply a fixed percentage of the ex-showroom price, while others use slab-based systems where the tax rate increases for higher-priced vehicles. Registration charges and local levies also vary from state to state, adding to the price gap.A clear example is the Hyundai Creta, one of India’s most popular SUVs. The base Creta E Petrol variant has an ex-showroom price of roughly Rs 10.72 to Rs 10.79 lakh across most cities. Yet the on-road price changes noticeably. In Delhi, it is about Rs 12.60 lakh, while in Kolkata it ranges between Rs 12.50 lakh and Rs 12.79 lakh. In Bengaluru, the price climbs to about Rs 13.36 lakh because of higher taxes. In Hyderabad, it goes up to nearly Rs 13.51 lakh. The same model costs around Rs 12.84 lakh in Mumbai and Rs 12.88 lakh in Chennai. These are roughly estimated figures.Fuel type can also affect the final price. In Delhi, petrol vehicles above Rs 10 lakh attract 10 percent road tax, while diesel vehicles in the same bracket face 12.5 percent tax, which increases the on-road cost further. Inputs from ANI.