Buying a new car is the second biggest financial decision after buying a house. In such a situation, financial planning is necessary for this. Buying a car requires a large sum of money at once. In such a situation, people have to take loans from banks to buy a new car. However, if a little planning is done, a new car can be purchased even without taking a loan from the bank.
There will be no hassle of EMI
There are two benefits of financial planning i.e. saving money and buying a car. Firstly the expenses will be reduced and secondly, there will be no hassle of EMI. How long you can wait for the car is very important because this will determine the period of investment. The longer you wait to buy a car, the more your investment will grow.
The cost will increase in 5 years
Suppose the car you are thinking of buying is priced at Rs 7 lakh today. After 5 years its value will be more than Rs 10 lakh. Meaning, if you want to buy the same car after 5 years, then you will have to arrange more than Rs 10 lakh to buy it without a loan. Since the timeline is 5 years, it would not be right to invest in equity mutual funds, because fluctuations are possible in equity mutual funds in the medium term. In such a situation, you have to invest in a place where fluctuations are less and you can get returns that beat inflation i.e. 7-8 percent.
The fund will be prepared through SIP
According to the SIP calculator, with an expected return of 8 percent, your SIP amount for the next 5 years should be Rs 14,018, while with a return of 10 percent, the SIP amount should be Rs 13,301. Returns in mutual funds can fluctuate depending on the market. In such a situation, keep an eye on the investment goal so that in case of a shortfall, the SIP amount or fund can be changed. 5 years is a long period. You may want to increase your budget. In this situation, there will be a need to increase SIP as the budget increases.
You will get a double benefit
By buying a car in this way, you will be able to save a good amount of money. On taking any loan from the bank, the customer also pays interest on the principal amount, which is included in the EMI. By raising money through SIP instead of paying EMI to the bank, you will not only save interest money but will also earn returns on SIP. This means that you can get double benefit by postponing the decision for a few years.
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