Buying your dream car can be more convenient with a systematic investment planning (SIP). By investing in a mutual fund in an advance, you can turn your dream of owning a car into a reality. Therefore, an SIP investment in mutual fund can help you be closer to achieving your dream.

Also Read: What is SIP?

Why choose mutual funds?

Buying a car is possible with mutual funds through proper planning without any worry. With the help of SIPs, you can build your wealth gradually without putting stress to your wallet.

To give more clarity, let’s assume you want to buy a car in the price range of 6-7 lakhs in 5 years with an expected return of 10% of CAGR. According to an SIP calculator, you will need to invest minimum Rs. 8,000 to reach your goal. Thus, you can use this information to adjust your financial plans accordingly.

[This calculator is based on assumed rate of returns and it is meant for illustration purposes only. Neither Aditya Birla Sun Life Mutual Fund/Aditya Birla Sun Life AMC Limited nor any person connected with them, makes no warranty about the accuracy of this calculator and will not accept any liability arising from the use of this calculator. The recipient(s) before acting on any information herein should make his/her/their own investigation and shall alone be fully responsible/liable for any decision taken on the basis of information contained herein.]

Try our Aditya Birla Sun Life Mutual Fund SIP Calculator for planning your money investment.

Buy your car with an SIP investment

SIPs allow you to do monthly or annually payments towards the purchase of your car. This can be a great option if you do not have cash up front but want to invest. This allows you to spread out the cash with systematic payment, making it more manageable.

When a chosen amount is deducted from your bank account, you are still left with some money for your daily needs. You can achieve best of both worlds by investing the money for the car and also managing your expense budget simultaneously.

An SIP investment in a mutual fund do not have deadlines to be stressed upon. You need to select a specific date of the month and the money is auto-deducted from your account on that day.

Choosing mutual funds for SIP investments

Choose a mutual fund properly that will help in fulfilling your dream of buying a car. Debt funds or equity funds may seem to be a relevant choice considering how early you are planning to buy.

If you have advantage of time to buy the car, you can invest in debt mutual funds. These funds invest in low-risk securities like government bonds or corporate bonds. However, debt funds may tend to provide lower returns on the capital wealth as compared to equity market. So, if you are a risk-taker with a greater appetite for capital appreciation, you can consider investing in equities.

You can go to Aditya Birla Sun Life Mutual Fund website to find out more about the mutual fund schemes.

To summarize,

An SIP investment helps minimize the financial burden for you with thorough systematic planning. As a result, you can freely pursue your dream of buying a car. Plus, the compounding power of SIPs can increase profits on your investments, helping you reach the goals faster.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.