<h1>GST cut lowers small car taxes to 18% and fixes luxury car tax at 40%, likely reducing motor insurance costs</h1> The government reduced GST on vehicles-small cars cut from 28% to 18% (petrol/LPG/CNG under 1,200 cc and diesel under 1,500 cc, both up to 4m) and large/luxury cars set at a flat 40% with no cess-altering vehicle pricing and market dynamics. Because motor insurance premiums are generally tied to the Insured Declared Value, lower vehicle prices should reduce premiums and may enable buyers to purchase broader coverage at lower cost. Insurer statements encourage consumers to compare policies and consider buying comprehensive cover while rates adjust, as increased sales could also heighten competition in the insurance market.