Is Now the Best Time to Buy Car Insurance After GST Reduction? Find Out
GST
Dated:- 26-9-2025
PTI
In a significant move aimed at boosting the automobile sector, the Government of India has recently announced a reduction in Goods and Services Tax (GST) rates across various vehicle categories. This change is expected to make vehicles more affordable, especially in the small and medium segments, thereby encouraging first-time buyers and expanding household mobility.
Understanding the GST Reduction
The revised GST rates are as follows:
Small Cars
The GST rate for small cars is reduced from 28% to 18%.
• This makes them more accessible for first-time buyers and enhances mobility for households.
• This GST reduction is l
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Car Insurance
With the potential reduction in vehicle prices, the cost of car insurance premiums is also expected to decrease. Insurance premiums are often linked to the Insured Declared Value (IDV) of the vehicle, which is directly influenced by the vehicle's market price. Therefore, as vehicle prices become more affordable, the IDV decreases, leading to a reduction in insurance premiums.
“The recent GST rate cuts present a unique opportunity for consumers to invest in car insurance at more affordable rates,” says Vinodh Sundareswaran, Head of Taxation, Royal Sundaram. “We encourage potential buyers to take advantage of this window to secure comprehensive coverage for their vehicles.”
Why Now is the Right Time
• Lower Premiums:
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