Huge differences in prices between cities

[Zappo]

I was surprised when I was recently looking at the prices for Swift VDi with ABS and immobilizer. I know the prices do vary from state to state. But it seems to vary between cities of the same state as well. And then how much should it vary even between different states? I mean I am not even talking about UTs...

Well, I found that the cheapest VDi (fully loaded) can be had from Dhule (in Maharashtra) where it costs approx Rs.5,17,000 whereas in Bhubaneswar (Orissa) the same car costs as high as Rs.5,43,000 approx or in Shillong (Meghalaya) it costs Rs.5,44,000, Itanagar it costs 5,46,448. And these are ex-showroom prices. So state levies like registration, road tax etc is not included. I mean W.T.F.! Won't I go to Jalgaon and buy the car and then drive it down to Bhubaneswar? A bloody difference of almost Rs. 26,000. Depending on other places it could go as high as 30k or even 35k. It will work out cheaper to drive it down from Dhule. Is there a rule that says that I must register a car in the same state where I bought it? I do not think so. Then what stops people from doing this? If the differences are this big I think it makes perfect sense.

And now here is the twist. In Mumbai the VDi top-end costs almost 5,45,000 whereas the same car can be had from Thane for a mere 5,19,000. Now why won't I saunter down to Thane and pick-up my car from there? Its a huge price difference afterall, the same state and almost the same city. Do the Mumbai dealers manage to sell any car at all? I wonder!

[abhilashvk]

Is there a rule that says that I must register a car in the same state where I bought it?

If you buy a car in a particular state and then ship/drive to another, you have to pay the State sales tax at the border/check post.

[typeOnegative]

Hmmm. Interesting thread. If you do want to buy the car in Thane and get it registered at Mumbai, you will have to pay the octroi as you drive it into Mumbai.

This is an interesting thread as well - Thane registration

[dadu]

Transport is a state subject and so the state taxes like registration, road tax are decided by the state transport department, which causes differences in the landed price.

Apart from it, some states/cities have Octroi while others dont so the ex-showroom prices also differs.

No you can always buy from a different state and register in another but the RTO then charges on the difference in price.

Earlier people used to buy from a cheaper state and register in their home state, but the state govt came up with the new rules to curb that.

[hvkumar]

In Bombay region, we have 4 prices:

Cheapest is Thane district, the neighbouring district
Next is New Bombay, where there is no octro, but a lessser amount of cess
Third is Bombay city, where we bear the brunt of octroi (4%)
Most expensive is Thane city, the neighbouring city

You can't buy anywhere because for registration you need to give proff of residence. Several used to buy cars with fictious addresses earlier, but now RTOs are stricter and insist on KYC-type (like the banks) proof (electricity bills, telephone bills, ration cards, etc) to check the tax abuse.

Nonetheless, several Bombayites do all sorts of tricks to buy in low-tax areas (since teh difference can be Rs 25,000 - 50,000, depending on the car).

Kumar

[hvkumar]

Nowadays, in Bombay, RTO inspectors raid residential buildings, check out the cars parked inside, and penalise those who have cars registered in other areas and the owner cannot produce valid residentail proof for that address). They also uncovered a lot of abuse whereby dealers used to provide fictious addresses to their customers in low-tax areas, such customers were served show cause notices (since they were traced to the service centres where they visited later) and penalities levied.

Kumar

[Zappo]

Hmmm... I am sure there has to be a way. In the case of Thane, if the savings can be as huge as 30000, I can always pay some 3-4k to an agent and get the work done. Find a friend or someone in Thane and then use his address. Even rent a small house for a month and use that address. Everything works out cheaper than that 26000 difference.

Otherwise also the agents can always invent these addresses for you. And I have never seen an RTA going overboard doing background check and address verifications etc. So once the vehicle is registered in Thane I can just drive it back to Mumbai. Thats it. Right? I can always drive a vehicle registered anywhere in Maharashtra within the state.

I really wonder what stops people in that case from buying from some neighbouring city and save big time.

[Technocrat]

Zappo the only problem I see is that we need to register the vehicle in the same place as that of purchase & for this we need to have a residential address proof for that city\place. If you can provide one I dont think there is any problem buying from such a place.

EDIT: oops you posted before me. Please ignore my post now

[Zappo]

Just because I registered a vehicle in Thane once can not mean that I gotta live there the rest of my life. I could have very well shifted. I take a PG accomodation for 1.5-2k for a month. Take a mobile connection on that address. Then I even buy a car and register it. After a month I shift residence to Mumbai. Thats it. Its a fact that I had a address in Thane at that point in time.

Even if tomorrow some inspector of RTA checks and even understands the modus operandi he can not do anything because I have the proofs. I had a cell phone in that address. Maybe even took a gas connection which can be surrendered and transferred to Mumbai at no extra cost. Basically there can not be any rule in state transport laws that says that if I buy a car at a particular address then I have to stay there for a minimum X no. of days or months or years.

[Technocrat]

Yes this way you can certainly get a way to buy a car from cheaper place.

p.s. when was the last time you applied for a gas connection it aint that easily available :|

[mail4ajo]

I dont think its an issue as long as the car is registered in your own name. I got my inlaws car registered at my chennai address whereas my inlaws stay in kerala.

If my inlaws are stopped by the law, they just mention that they are in Kerala on business or personal visit. I may have a business in many cities and stay in another city. I cant change my car registration for that!!!!

[vid6639]

Well us bangy boys have the highest price to contend with i think.

mail4ajo, you cant use the car in another state for more than a month I think. My friends WB registered car was towed from his house one night. He went to the station and had to pay the fine as well as road tax of karnataka at the rto. Another friends car was confiscated as it was a PY registered car.

Generally all TN cars are caught. If you have a recent fuell bill from TN they let you go else fine you.

[hondadude]

Originally Posted by mail4ajo

If my inlaws are stopped by the law, they just mention that they are in Kerala on business or personal visit. I may have a business in many cities and stay in another city. I cant change my car registration for that!!!!

At least in Bangalore, this doesn't work. Cops are usually on the lookout for such cases.

[Zappo]

Actually mail4ajo it does not work even in chennai. When I was there I saw the alacrity the cops show in catching hold of any non TN vehicle, be it a car or a bike.

Actually AP is much better that ways. Cops are much more benign here. Hyderabad is flushed with cars and bikes with DL, TN, KL, KA, MH and all the other sorts of vehicles. Once in a while someone may get caught but generally cops turn their eyes away from such cases.

But then, to bring the topic back on the rails the question was not on whether you can drive an out of the state car or bike. The question was what stops me from getting a new vehicle from a place where it is the cheapest and then register it here?

[hvkumar]

Originally Posted by vid6639

mail4ajo, you cant use the car in another state for more than a month I think. .

That is right, same thing in Bombay also. When you shift residence, you are supposed to change the address. In Bombay, that means you pay not only octroi but also entry tax (sales tax dept) based on estimated value of the car (as per some tariff sheet with RTO/BMC, etc) and bring the car in.

Kumar