Want a car? Start by setting a budget. Choose a car you like within that budget. Decide: loan for quick buy with extra costs, or save over time without loans. If you opt for a loan, pay a down payment and manage EMIs. If you wait and save, plan when to buy considering inflation’s impact. Invest smartly, pick long-term options like mutual funds for growth. Use SIPs for steady investing. Remember, compounding boosts savings. For quicker goals, short-term debt funds work. Mix investments wisely. Early investing is key. Reach your dream car goal with a smart plan.
When you’re thinking about buying a car, start by figuring out how much money you can spend. Right now, a decent car costs about Rs. 7 to 20 lakh. You can choose a more expensive or cheaper car based on your income, needs and requirements. Once you settle on a budget, try not to change it later. Let’s say you’re aiming for a Rs. 10 lakh car.
Next, consider how you’ll get the money. You have two options: get a loan to buy the car now or save up and buy it later.
With a loan, you can buy the car immediately without saving a lot upfront. Typically, loans cover 80% of the car’s cost. For a Rs. 10 lakh car, you’d pay around Rs. 2 lakh upfront, and the rest is paid in monthly installments over 5 to 7 years. Keep in mind that loans come with interest and fees, so the overall cost will be higher.
On the other hand, if you decide to wait and save up, you’ll spend less overall and won’t have to worry about monthly payments.
Waiting Route
Saving Route !
If you opt for the waiting route, you need to decide how long you’ll wait before making the purchase. This affects how much your savings can grow. Waiting longer allows your money more time to increase. However, if you’re planning to buy the car within the next 5 years, similar to a car loan duration, think about how inflation could make the car cost more.
Assuming car prices continue to rise as they have been, a Rs. 10 lakh car today might cost Rs. 15.39 lakh in 5 years @9% inflation. That’s the savings goal you should aim for :
How Much Should You Invest Each Month to Reach your Target Corpus of Rs ₹ 15,39,000
In Period of : 5 Years
Assumed SIP Rate of Return (CAGR) |
@ 12.00% |
@ 10.00% |
@ 7.00% |
Per Month contribution required to save for a Car (SIP) |
₹ 18,975 |
₹ 19,938.00 |
₹ 21,490.00 |