Today we will talk about how to plan and make strategies to save some money and own a new car. This is the desire of most of the people but it is not as easy as it sounds. It's important to first do your homework considering how much you can comfortably pay the cash and apply for loan for the rest of the amount for how long.
The amount saved to buy the car reduces the amount you have to borrow for purchasing the car. Also, this puts you in a stronger position at the dealership and can save amounts in interest. Simply, you can use the online car loan interest calculator that helps you to determine the rate of interest for your car loan according to your auto-loan terms. Also, when it comes to the number of payments then, a car loan calculator helps you to determine it and even the total car loan amount with a complete amortization schedule.
1. Select your budget for the Car
You should be able to choose the most suitable budget in your mind and pen down on a paper, to perform all the calculations and follow as per the strategy.
If it is less than ₹5 Lakh then you can keep reading...
2. Choose the Source of Saving
There could be "n" no. of possible sources for your saving such as savings from your salary, investing, redemptions, collecting money every months in piggy bank etc.
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3.Time Duration
This is the most important factor in which you have to be more conscious that is time span like after how many days you want to get your Car - is it 1 month, 3 months or 6 Months. Yes - 6 months is good time to follow your Car buying passion to pay with down payment and get it at an easy EMI.
4. Less EMI More Down payment
So the Calculation Starts here for your Car : Let's suppose you plan to buy a brand new HatchBack for around ₹5.0 Lakh. Now this will be your selected Target at price ₹5 Lakhs (Approx.) and you have 6 months to purchase a car with the down payment and loan option. So in just 6 months you have to make at least ₹50000 saved for the down payment so that you an buy and live the peaceful life by not paying much EMI .
5. Economic Strategy
1. Start saving ₹100 from your wallet per day. 100 * 180 = ₹18000
2. Start Recurring Deposit of amount ₹3500 for 6 months. 3500 * 6 = ₹21000
3. Invest in growing mutual fund (SIP) of around ₹2000 for 6 months. 2000 * 6 = ₹12000
Expected rate of interest is minimum 15% as per the current market. (Subjected to change as per market fluctuation)
With this plan, you are able to pay the down payment of ₹50000 or more if you get more returns in SIP to the dealer and you can apply for car loan of ₹4,50,000 at good interest rate as per your selected bank.
* If you are a good CIBL scorer, bank may offer you minimum 8% interest. At 4.5 Lakhs loan amount with 8% annual interest for 5 years will be approximately ₹9124 per month EMI.
