Thinking about a new car? You might want to wait a bit:

If you’ve been scrolling through car brochures and planning a new purchase, this might be the best news you'll hear all year. Your patience could literally save you a lot of money, especially if you're eyeing popular models like the Hyundai Creta, Mahindra Thar Roxx, or a sleek Volkswagen Virtus.

Starting September 22, 2025, thanks to some important changes in the GST (Goods and Services Tax), many cars are set to become more affordable. So, take a deep breath and maybe hold off on that booking for just a little while.

What’s changing with the taxes?

Let’s break down the money part without making it complicated. Until now, cars longer than 4 meters came with a 28% GST, plus an extra "compensation cess" that could be anywhere from 15% to 22%. That cess is an additional tax that really pushed the final price up.

The government is now simplifying this. They're getting rid of the compensation cess completely and setting a flat GST of 40% for these cars. Now, you might think, "Wait, 40% is higher than 28%!" And you're right. But because the hefty compensation cess is gone, the total tax you pay is actually going to be lower than before.

How much can you actually save?

The savings will depend on the type of car you're looking to buy. Here’s a quick look:

Big SUVs get the biggest price drop: If a powerful SUV like the Tata Safari, Mahindra XUV700, or Toyota Fortuner is on your list, you’re in luck. The total tax on these vehicles is dropping by a solid 10%.

Mid-size SUVs and sedans see good savings too: For cars like the Hyundai Creta, Kia Seltos, Volkswagen Virtus, and Skoda Slavia, the total tax will be 5% lower.

Hybrid cars get a nice discount: If you're going green with a Toyota Innova Hycross Hybrid or a Maruti Grand Vitara Hybrid, you'll see a 3% reduction in the total tax.

The savings don’t stop there.

Here's another great part of this news. The ex-showroom price of a car includes all these taxes. When the ex-showroom price goes down, the RTO tax (or road tax), which is calculated on this price, also becomes cheaper. So, the final on-road price you pay will be even lower than you expect. It's a win-win.

So, what’s the plan?

The new, lower tax rates will kick in on September 22, 2025. It might feel like a bit of a wait, but if you're not in a rush, it’s worth holding on. Car manufacturers will announce their updated price lists around that time. With the festive season just around the corner from that date, it’s shaping up to be the perfect time to bring home a new car without breaking the bank.