Is Delhi Government Planning To Cut Vehicle Registration Cost In Its Upcoming Budget?

The vehicle registration cost in Delhi is known to be relatively high compared to some of its neighbouring states like Haryana. Right now, the road tax on passenger cars is somewhere between 8 to 12 per cent of the total cost of the vehicle, depending on the price bracket. The same in Haryana stands at around 6 to 9 per cent. This is why you'll see a lot of customers gets their vehicles registered in Haryana to save on road tax. However, this might soon change. Currently, it is rumoured that the vehicle registration cost in Delhi will be going down in the upcoming Delhi budget. In fact, it's expected to fall to Haryana rates.

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Now, at this stage, these are merely speculations, and there's no official confirmation about this happening. However, can such a move help boost auto sales in the nation's capital? While we believe that it won't have any major impact on retails, but to better understand the implications of reduced registration cost on vehicle sales, we reached out to a few industry experts.

At this stage, these are merely a rumour, however, even if the road tax comes down, experts says it won't help boost vehicles sales

Speaking with carandbike on this matter, Nikunj Sanghi, owner of J.S. Fourwheel Motors, a dealer partner of Mahindra and Hero MotoCorp, said, "Immediately we have no such indication that something like this is being done. However, if it is done, while it will not increase the number of vehicles being purchased, what it will definitely do is that some of the people who are purchasing vehicles from Haryana, just because the road tax rates there are lesser, that would stop. So, in terms of Delhi registrations, the numbers would increase, but I don't think the number of vehicles being purchased will." He further added. "Right now, the rates are anywhere from 8 to 12 per cent, so the decrease would be 2 to 3 per cent, and that is not a sufficient decrease to increase the number of vehicles being sold. But, it will definitely stop the migration to Haryana."

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At the same time, Arun Malhotra Former Managing Director of Nissan India and Auto Industry Expert said, "These are still speculations. But, if true, this will definitely be related to road tax, and if so, prices of vehicles will definitely come down in Delhi. However, I urge both the industry and the government to think about standardising the road tax across the country, as it will prove to be beneficial for the end customer."

industry expert Avik Chattopadhyay says, instead of registration cost, reduction in insurance rates will have a much higher impact on vehicle sales

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On the other hand, auto industry expert Avik Chattopadhyay said, had similar views to Sanghi. Stating that while there has been some chatter about the reduction in registration cost, it's nothing that can be verified. He said, "Even if it does fall, it will be minuscule to lift sentiments and positively impact sales. Registration cost is a one-time expense. Insurance rates have to come down as it is a recurring cost and then it might create some impact song with a reduced registration cost." He further added, "The overall ownership cost has to come down to provide an incentive for purchase. Just the registration cost does not help. Keep it as it is but reduce insurance premium by half and then see the impact."

We also reached out to some of the major passenger car manufacturers like - Maruti Suzuki India, Hyundai India, Tata Motors and Mahindra & Mahindra, to get an OEM's (original equipment manufacturer) perspective on the matter. While Tata Motors declined to comment on this, others were not immediately available for a reaction.