Want to buy Rs 10 lakh car through SIP investment? Know how much SIP amount you need to invest monthly or annually
Buying a Rs 10 lakh car can be a financial goal for many. One can buy it after making a large down payment or in cash, or by making monthly or yearly investments and creating a corpus. But if someone wants to buy a Rs 10 lakh car in 5 years, what can be their monthly or yearly SIP investments? Know here-
SIP Calculations: Setting financial goals and achieving them one by one through investments can make the task easy for many of us. The goal can be to buy a home, go on holidays, get married, educate a child, or purchase a car. One needs a sizeable cash amount to achieve these goals in one go. So if one knows at what stage of their life they want to accomplish these targets, they can calculate the required amount and know how much they need to invest to achieve that. Let's see what the monthly or yearly SIP investment amounts would be if one wants to buy a car worth Rs 10 lakh in 5 years at an annualised investment growth of 10 per cent, 11 per cent, or 12 per cent.
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(Disclaimer: This is not investment advice. One needs to do their own due diligence or consult an expert for financial planning.)
Car price now
Since the value of money changes over time, the car that costs Rs 10 lakh now is most likely to cost higher in 5 years. We assume a 5 per cent annual price rise in car rates.
Car price 5 years later
If we are assuming a 5 per cent annual rise in the car price, the price of a Rs 10 lakh car will be an estimated Rs 12,76,282 in 5 years. So, that can be our investment target.
SIP investment
We will calculate the investment amounts at annualised growth rates of 10 per cent, 11 per cent, and 12 per cent, respectively. We will calculate the monthly and yearly SIP investment amounts.
Monthly SIP amount at 10 per cent annualised return
The estimated monthly SIP investment to buy a Rs 10 lakh car in 5 years will be Rs 16,340.
The total investment will be Rs 9,80,400, and estimated capital gains will be Rs 2,95,466.
Annual SIP amount at 10 per cent annualised return
The estimated annual SIP investment amount to buy a Rs 10 lakh car in 5 years will be Rs 1,90,047.
The total investment in 5 years will be Rs 9,50,235 and the estimated capital gains will be Rs 3,26,047.
Monthly SIP amount at 11 per cent annualised return
The estimated monthly SIP investment to buy a Rs 10 lakh car in 5 years will be Rs 15,900.
The total investment will be Rs 9,54,000, and estimated capital gains will be Rs 3,21,927.
Annual SIP amount at 11 per cent annualised return
The estimated annual SIP investment to buy a Rs 10 lakh car in 5 years will be Rs 1,84,625.
The total investment in 5 years will be Rs 9,23,125, and the estimated capital gains will be Rs 3,53,162.
Monthly SIP amount at 12 per cent annualised return
The estimated monthly SIP investment to buy a Rs 10 lakh car in 5 years will be Rs 15,470.
The total investment will be Rs 9,28,200, and estimated capital gains will be Rs 2,79,734.
Annual SIP amount at 12 per cent annualised return
The estimated annual SIP investment to buy a Rs 10 lakh car in 5 years will be Rs 1,79,375.
The total investment in 5 years will be Rs 8,96,875 and the estimated capital gains will be Rs 3,79,412.
Estimated cost if one buys it through loan
We are assuming a minimum down payment of Rs 2 lakh and Rs 8 lakh loan. We are considering 13.50 per cent as the car loan interest rate. The loan is for 5 years.
Estimated cost if one buys it through loan
The estimated EMI on this loan will be Rs 18,408, the estimated interest will be Rs 3,04,473, and the estimated repayment will be Rs 11,04,473. Adding Rs 2 lakh of down payment to it, the estimated amount required for buying a car will be Rs 13,04,473.