Does Car Type Affect your Car Insurance Plan Premium and GST?

Most of the people in India, especially the middle class, dreams of possessing just one car. When one decides to buy a car, one desires the best possible deal out there. If you can negotiate well, you can get a pretty good deal with lower monthly payments in case of car loans, total car price, and more.

The needs of every family are different. Your needs are different from your neighbor. Likewise, the car you are looking for is likely different than what your neighbor is looking for as well. You may be looking for a family car while your neighbor wants a high-end sports car. When buying a car, remember your family size, the car’s mileage, and its fuel type. If you want to buy a second-hand car, look at its age, condition and previous ownership.

The process of finding a motor car that suits your needs can be time-consuming at best. This is largely due to the huge amount of models and makes out there. If this is your first time buying a car, terms like hatchback and sedan won’t help you much on the market. Besides, these terms are not as important as the mileage and fuel type. At the same time, the car’s body condition has a weight on the motor insurance premium too. Remember these things when looking for a new car.

Let us now take a look at some of the various car types found in India. Research on the cost and the motor car insurance premium of the various models too.

Types of Car Bodies

Here are the most common types of car bodies as found in India.

1. Sedan: These can seat as many as 5 passengers comfortably. The trunk of these cars is bigger and therefore can hold a considerable volume of luggage, which makes these ideal for trips. Sedans are large generally, including its dimensions, height and wheelbase. There are three types of configurations as well like compact, notchback and fastback. 

2. Hatchback: These cars are smaller and have 4 doors and a boot. These hold 4 passengers comfortably. The boot space is adequate for a couple of bags max. There are also two subtypes: super mini and one larger variation. These cars are ideal for use with the city, and can handle all traffic conditions.

3. MUV: MUV stands for Multi-utility vehicles. These are also called MPV or Multi Purpose Vehicle, and people carriers. These vehicles offer a lot of space and increased comfort for its passengers. There are generally 3 rows of seats, and the doors are larger. The third row is easily configurable.

4. SUV: SUV stands for sports utility vehicle. It has a body-on-frame chassis. It is ideal for driving on highways, while it is noteworthy in its performance off-road.

5. Crossovers: These are across between hatchbacks and SUVs. It seeks to combine the benefits of both, although some experts say that it cannot fully give the benefits of either one. These cars, like SUVs, have a unibody construction.

6. Convertible: These are also known as cabriolet and roadster. These cars have removable roofs that facilitate open air driving. Naturally, these cars are quite expensive.

7. Coupe: These are 2-door cars and have a fixed roof. It is a two-seater and the appearance is sporty. Compared to average cars, there is not much space in the rear.

8. Vans: These offer a lot of flexibility when it comes to storage space and interior space. These are highly configurable and are ideal for commercial purposes.

9. Wagon: These offer the best features of both hatchbacks and sedans, offering more space behind the second row of seats. Wagons are larger than hatchbacks.

10. Jeep: These are similar to MUVs, but in the case of jeeps you have the option of getting a hardtop or a soft top. These cars are best suited for cross country journeys, and are popular amongst adventure drivers as a result.

11. Pickup cars: These are actually an MUV, but with adequate luggage space. These seat 5 people easily.

GST and Cess on various car models

After the start of the GST implementation, the rate of GST on mid-size cars has become 45% (including 2% cess), on SUVs 50% (including 7% cess), and 48% on large cars (including 5% cess).

Cars longer than 4000 mm and having ground clearance of 170 mm shall be given 50% GST.

The implementation of GST has resulted in a drop of car prices. Tax rates post GST were lower than the pre-GST times. For some models, the price drop was around Rs. 3 lakhs. In time, the government raised the cess on large and mid-sized cars.

Under the GST tax system, cars are under the highest tax slab of 28%. The cess is levied over the tax.

1. Small petrol cars with 1200 cc engine capacity are now charged with 1% cess over the 28% GST.

2. Diesel cars with 1500 cc engine capacity are charged with 3% cess above 28% GST.

3. Hybrid cars that can transport 13 passengers are given 15% GST cess.

The relation between your car model and your car insurance plan

The type of car you have is directly related to its insurance premium. A comprehensive car insurance gives your car protection from man-made and natural problems and damages. You can increase the base protection of the policy by adding add-on services.

When getting car insurance, the factors having the most weight are the made and model of the car, and its engine capacity. Here are the latest guidelines as given by the IRDAI.

1. Engine capacity not more than 1000 cc – Rs. 2055 third-party liability premium

2. More than 1000 cc but not more than 1500 cc- Rs. 2863 third-party liability premium

3. More than 1500 cc- Rs. 7890 third-party liability premium

Additionally, sports cars and luxury cars have higher premiums as these are considered to be high-risk vehicles. Premiums are higher as well for cars with alternate fuel systems like LPG and CNG kinds.