Cheapest State to Buy a Car in India

India is a country where every home dreams of their dream car but with a specific budget and there are so many parameters technically and financially the buyer research before buying a car.

Efficient fuel economy, high end features, maximum accessories, stylish looks and all these in a pre-decided budget. But which state is best for buying a car in India? This is the question which every Indian must have thought.

Today buying a car is not a big deal but the place where we stay or the state where you reside is always matters. Different states have different rates be it basic price, tax value and variations, RC transfer factors.

Factors deciding the best state to buy a car

Now let’s focus on some of the factors that decide the best state to buy your dream car.

  1. Price in Different States

Price is the most important factor to buy a car. Car having affordable price and maximum features could be considered as the best win. Now the price may differ in various states on various factors. Let’s have a look at broader discussion on which state buying a car is best for you according to various parameters.

Which Most Expensive State to buy a car in India?

Karnataka: If you live in Karnataka then you have to choose your car very carefully because the on-road prices of cars like Maruti Suzuki Alto Hyundai i20, Hyundai i10, Maruti Suzuki Vitara Brezza, Maruti Suzuki Swift have comparatively highest rate here. For eg. Maruti Suzuki Swift in Bangalore itself cost INR 5.19 Lakhs (On Road Price).

Which state is cheapest to buy a car?

Pune : Pune being smart city is also a hub of some of the cheapest cars. Maruti Suzuki Swift is INR 5.18 Lakhs whereas in Gurgaon it is INR 5.47 Lakhs considering on road price. If we take an example of Mahindra TUV 300 is INR 7.98 in Delhi is INR 9.92 Lakhs and in Pune it is 8.43 Lakhs.

Apart from these states, Gurgaon, Pune, Goa, Dehradun, Patna, Chandigarh also have comparatively competitive prices, we can’t say cut throat prices but still you could find a decent difference depends on the car, its company, model etc.

  1. Road Tax Fees

Road Tax Fees for the process of new car registration for different cities are as below :

  • Delhi : Price ranging from 6 Lakhs to 10 Lakhs could range Road Tax Fees 4-10% for Petrol Cars and for Diesel Cars it range from 8.75% to 12.5%.
  • Uttar Pradesh : Price ranging from 5-10 Lakhs can cost 8% of road tax irrespective of diesel or petrol cars.
  • Haryana : For price upto 6 Lakhs it can cost 8%.
  • Gurgaon : Price rangin from 6 Lakhs to 20 Lakhs it is 8%.
  • Maharashtra : Be it Mumbai, Pune or Nagpur road tax fees is same.
    • CNG : Below 10 Lakhs – 7%
    • Petrol : Below 10 Lakhs – 11%
    • Diesel : Below 10 Lakhs – 13%


  • Andhra Pradesh and Telangana: Below 10 Lakhs – 12%
  • Kerala : Cars ranged between 20-40 Lakhs –Rs. 40,000/- Below 5 Lakhs – 6%
  • Karnataka : Below 5 Lakhs- 13%
  • Bengaluru : Price range between to 10 Lakhs – 14%
    Price Range between 10 to 20 Lakhs – 17%
  • Punjab : 8% of Ex-Show room price along with 1% of Surchage Tax imposed on Ex-Showroom Price as Social Security Contribution.
  • Gujarat : 6% on individual cases and 12% on Company.
    For Completely Knocked Down Cars (CKD) the rates will be double that of Completely Build Up Cars (CBU)
  • Rajasthan : 7% for Petrol Cars and 10% on Diesel Cars.
  • Bihar : 7% on prices above 6 Lakhs and 13% on prices above 10 Lakhs
  • Puducherry (Formerly Pondicherry) : There is a negligible road tax in Puducherry. Comparatively you can save upto 20% when registering your car at Puducherry. Minimum Rs. 8000/- could cost you on buying cars below 5 Lakhs.

3) Additional Tax

It could levy on you if you are buying a second car on the same name as the first one. Its range varies from 2.5% to 16% depends on the price segment and of course depends on state.

4) Infrastructure Cess

Applicable on cars priced above 10 Lakhs –

  • Cars ranged between 10-20 Lakhs – Rs. 12,000/-
  • Cars ranged between 20-40 Lakhs –Rs. 40,000/-
  • Cars ranged between 40-60 Lakhs –Rs. 75,000/-
  • Cars ranged above 60 Lakhs –Rs. 1,00,000/-

State to Buy a Car in India FAQs

Can I buy a car in another state in India?

Yes, but there are certain procedures involved in it that you have to mandatorily follow. These procedures can be accomplished by a mediator or an agent also but to drop in your knowledge, below are the chronology of procedures involved:

Procedure No. 1 – Procurement of No Objection Certificate (NOC) From the Traffic Department:

In order to get the NOC from the Regional Transport Office (RTO), the car owner will have to submit two NOCs which are indicated below

  1. One NOC from the traffic police that will indicate that there are no fines or legal dues pending with the individual.
  2. Another thing a report from the National Crime Records Bureau (NCRB) to be submitted that clarifies that the car was not involved in any accident and was not stolen. This is required in some states.

Now, the documents required to get NOC from the above mentioned NCRB and traffic department are listed below:

  • A letter addressed to the Deputy Commissioner of Traffic.
  • Copy of the car’s RC, insurance papers, and Pollution Under Control (PUC) certificate.
  • Driving license copy.
  • Address proof of the car owner (Can be anything be it, the driving license, ration card, passport, or bank passbook.
  • A Clearance letter from the financing bank, if the car is under a loan
  • Please make sure to carry all the original documents when you visit the Traffic Police office for the verification process. The NOC may be provided after a few days.

Procedure No. 2 – Visit The RTO Office With Relevant Documents:

After the NOCs from the traffic department and NCRB are obtained, the car owner will have to visit the RTO with the documents listed below:

  • Form 28 – This is the Application for No Objection Certificate and Grant of Certificate.
  • Attested copy of the Registration Certificate.
  • The car’s valid insurance document.
  • Valid PUC Certificate of the car.
  • NOC from the traffic police that indicates the absence of any fines or dues.
  • Clearance from NCRB – This is needed only in some states.
  • NOC from the financing bank if the car is under hypothecation.

Procedure No. 3 – Document Submission:

Submit all the relevant documents and pay the applicable fees.

Procedure No. 4 – Pay Road Tax:

The car owner is required pay road tax again in the new state he/she has moved to. The RTO officer will calculate the road tax on the basis of the original invoice of the vehicle. The applicant will have to pay the road tax through a demand draft. After this payment, he/she can get the previous road tax reimbursed. The documents required for processing the road tax refund are as follows:

  • Application for road tax refund
  • Updated and signed Form 16, which is essentially the applicant’s salary certificate from the employer
  • Copy of the new registration certificate
  • Copy of the old registration certificate
  • Insurance policy with new registration number
  • Proof of ID
  • Address proof

Which is the best month to buy car in India?

Following are the best time to buy a car in India:

  • March: This month is actually best for business persons as the expense of buying the car be shown as business expense and thus can save expense. Car Dealers also float various offers to lure business persons.
  • December: This month is beneficial for various reasons like:
  1. This is the year end which means a sales-person won’t lose a deal against a negotiation so a buyer can demand a pretty decent negotiation to buy a car.
  2. According to a survey, you can actually end up saving up to 8.3% off the price of a new car if you visit the dealership on New Year’s Eve instead of any other day. This is because this is the last day a dealer has in order to make both their quarterly and yearly goals. As such, they have a fat bonus on the line so they want to get the cars out the door as soon as possible.
  3. Year end brigs lot of new and exciting offers with heavy discounts.

What is the Cheapest Way to Buy a Car?

Following are the cheapest way to buy a car:

  • Buying a cheapest car with cash as you won’t pay the interest, and you won’t be paying for as much depreciation either.
  • If you don’t have enough cash then you can get a pre-approved for a car loan.
  • Researching about post ownership cost. The true cost of ownership includes what you’ll pay in gas, insurance, repairs, taxes, licensing, maintenance, and more


Which state has highest and lowest road tax in India?

Karnataka government as in the rules applies mostly to Bangalore given scale of migration has asked all vehicles registered outside the state to pay lifetime road tax. So whether you are in the state for an year or two one pays the tax for using Bangalore’s “special roads” for lifetime.

Which state has the lowest road tax in India?

Delhi, because CNG cars grab the lowest road tax.  

Final Take

If a car is being purchased, then there are certain things that need to be considered deliberately like make, model, taxes levied, accessories, features, every single thing has to be checked compared with different segments and then the decision has to be taken be it any state.

However, we have provided you some idea above that how and from where you could go and purchase a car but we still recommend you to check and compare as many times as possible after all it’s a dream come true moment to own a car.


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