SIP for Car

A Systematic Investment Plan (SIP) is an easy way to save for your dream car. It allows you to invest small amounts regularly in mutual funds, helping you build a corpus over time without financial stress. SIPs offer the advantage of compounding, which helps reduce the need for loans or EMIs. It is a smart and disciplined approach to achieving your goal.

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SIP Plan Benefits
Start SIP with as low as ₹1000
Start SIP with as low as ₹1000
No hidden charges
No hidden charges
Save upto ₹46,800 in Tax
Save upto ₹46,800 in Taxunder section 80C^
Zero LTCG Tax
Zero LTCG Tax
Disciplined & worry-free investing
Disciplined & worry-free investing

  • Insurance Companies
  • Mutual Funds
Returns
Fund Name 5 Years 7 Years 10 Years
High Growth Fund Max Life
Rating
33.56% 19.72%
16.82%
View Plan
Top 200 Fund Tata AIA
Rating
33.06% 20.69%
16.57%
View Plan
Accelerator Mid-Cap Fund II Bajaj Allianz
Rating
26.11% 11.93%
13.25%
View Plan
Opportunities Fund HDFC Standard
Rating
26.28% 13.34%
13.43%
View Plan
Growth Plus Fund Canara HSBC Oriental Bank
Rating
18.66% 9.86%
9.13%
View Plan
Grow Money Plus Fund Bharti AXA
Rating
23.24% 13.96%
12.71%
View Plan
Multiplier Birla Sun Life
Rating
27.71% 12.46%
14.1%
View Plan
Opportunities Fund ICICI Prudential
Rating
24.94% 12.68%
10.91%
View Plan
Flexi Growth Fund LIC
Rating
- -
-
View Plan
Virtue II PNB Metlife
Rating
23.2% 17.21%
15.2%
View Plan
Fund rating powered by
Last updated: Mar 2025
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  Returns
Fund Name 3 Years 5 Years 10 Years
Active Fund QUANT 23.92% 31.48%
21.87%
Flexi Cap Fund PARAG PARIKH 20.69% 26.41%
19.28%
Large and Mid-Cap Fund EDELWEISS 22.34% 24.29%
17.94%
Equity Opportunities Fund KOTAK 24.64% 25.01%
19.45%
Large and Midcap Fund MIRAE ASSET 19.74% 24.32%
22.50%
Flexi Cap Fund PGIM INDIA 14.75% 23.39%
-
Flexi Cap Fund DSP 18.41% 22.33%
16.91%
Emerging Equities Fund CANARA ROBECO 20.05% 21.80%
15.92%
Focused fund SUNDARAM 18.27% 18.22%
16.55%

Last updated: Feb 2025

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Buying the Dip Results in Higher ReturnsBuying the Dip Results in Higher Returns

What is SIP for Car?

A SIP for a car is a planned approach to save money for your dream car. It involves investing a fixed amount regularly in mutual funds, helping your savings grow over time. This method ensures disciplined saving while taking advantage of market returns. A SIP for a car allows you to set a specific goal, invest within your budget, and avoid the burden of a car loan. It is a smart and efficient way to achieve your car-buying goal at your preferred timeline.

SIP Calculator

I want to invest Pro Tip
Financial experts suggest that a person should invest 10-15% of their monthly income for long-term financial growth
/Month
I want to invest for Pro Tip
Financial experts suggest that individuals should ideally invest for a period of 5 to 10 years, or even longer, to maximize the benefits of compounding and navigate market fluctuations effectively
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Expected return Pro Tip
Top 25% of investors consistently generate more than 12% return
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Total Wealth ₹22.4 L
View Plans
I want to save
I want to invest for Pro Tip
Financial experts suggest that individuals should ideally invest for a period of 5 to 10 years, or even longer, to maximize the benefits of compounding and navigate market fluctuations effectively
Years
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Expected return Pro Tip
Top 25% of investors consistently generate more than 12% return
% Annually
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Monthly Investment ₹22.4 L
View Plans
Top Funds with High Returns (Past 7 Years)
High Growth Fund
16.82%
High Growth Fund
Top 200 Fund
16.57%
Top 200 Fund
Accelerator Mid-Cap Fund II
13.25%
Accelerator Mid-Cap Fund II
Opportunities Fund
13.43%
Opportunities Fund
Growth Plus Fund
9.13%
Growth Plus Fund
Accelerator Fund
11.71%
Accelerator Fund
Grow Money Plus Fund
12.71%
Grow Money Plus Fund
Multiplier
14.1%
Multiplier
Equity Top 250 Fund
10.7%
Equity Top 250 Fund
Future Apex Fund
11.43%
Future Apex Fund
Opportunities Fund
10.91%
Opportunities Fund
Frontline Equity Fund
12.95%
Frontline Equity Fund
Virtue II
15.2%
Virtue II
Pension Dynamic Equity Fund
9.52%
Pension Dynamic Equity Fund
Top 300 Fund
11.03%
Top 300 Fund
Blue-Chip Equity Fund
9.19%
Blue-Chip Equity Fund

Cost of Delay Calculator
Start early, gain more
Monthly SIP Amount
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Invest For (in Years)
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If you start SIP after (in Months)
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Due to the delay of 10 Months

Your Target Wealth will reduce by 13.3%.

With loss of ₹13,87,249

Start TodayDelayed Start
Invest Now

How an SIP for Car Work?

The following steps are simple guide to understand how SIP can help you save for your car purchase in a systematic and efficient way:

  • Choose the Right SIP Plan: Pick a best SIP plan that fits your goal of buying a car based on how much time you have and the car's cost.

  • Decide Investment Amount: Choose how much money you can invest every month, depending on your budget and the amount you need for the car.

  • Pick a Mutual Fund: Choose a mutual fund that suits your risk level (low, medium, or high) to get good returns over time.

  • Start Investing Regularly: Begin investing a fixed amount each month through auto-debit or ECS, without missing any payment.

  • Monitor Your Investment: Keep an eye on your SIP’s performance regularly, making sure it’s on track to meet your car fund goal.

  • Withdraw and Buy Car: Once your SIP grows enough, withdraw the amount and use it for buying your car.

SIP Calculator to Estimate Amount for Car

A SIP calculator helps you estimate how much you need to invest monthly to save for a car. It considers your target amount, expected return rate, and investment period. 

Let us understand the application of the calculator for a car purchase by selecting the “I Know My Goal Amount” option in the SIP calculator:

  • Car Price Estimate: â‚ą15,00,000 for a good-range car in 2024.

  • Investment Duration: 5 years.

  • Expected Return: 15% annually.

The calculator will estimate the monthly contributions you need to make to cover the amount of â‚ą15,00,000 in 5 years.

  • SIP Calculator Results:

    • Total Investment: â‚ą10.3 lakhs

    • Monthly Investment Required: â‚ą17,200

    • Wealth Gained from SIP: â‚ą4.7 lakhs

Start An Sip Today Watch Your Money Grow Start An Sip Today Watch Your Money Grow

Key Points to Consider Before Investing in an SIP for Car

Following are the key points to keep in mind before starting a SIP for your car purchase:

  • Set a Clear Goal: Decide the total cost of the car and when you want to buy it. This will help plan your SIP amount.

  • Calculate Monthly Savings: Use a SIP calculator to find out how much you need to save every month to reach your goal.

  • Choose the Right Mutual Fund: Pick funds that are less risky, like hybrid or large-cap funds, for steady returns.

  • Match SIP Duration with Goal: Make sure the SIP tenure matches your car purchase timeline. For short-term goals (2-5 years), avoid high-risk funds.

  • Check Expected Returns: Look at the fund’s past returns to ensure it can help you reach your target.

  • Track Progress Regularly: Keep an eye on your SIP’s performance and adjust if needed to stay on track.

  • Ensure Liquidity: Choose a fund that lets you withdraw money easily when you are ready to buy the car.

  • Know Tax Rules: Understand if there are any taxes on the returns or charges for withdrawing your money early.

  • Keep an Emergency Fund: Always maintain a separate fund for emergencies so you don’t use your SIP savings.

  • Avoid Emotional Decisions: Do not worry about short-term market ups and downs. Stay focused on your goal.

Key Benefits of Investing in an SIP for Car

The key benefits of SIP investment are listed below:

  • Disciplined Investment: Regular SIP investments help build a corpus without the need for large lump-sum investments.

  • Compounding Power: The returns on your SIP grow exponentially over time.

  • Flexibility: SIP amounts and investment durations can be adjusted according to your financial situation.

  • Affordable Contributions: Start with small amounts, making it easier to save without financial strain.

  • Customizable Tenure: Set a SIP duration that aligns with your car-buying timeline.

Start Small & Build Your Wealth For A Brighter Tomorrow Start Small & Build Your Wealth For A Brighter Tomorrow

Conclusion

A SIP for a car helps you invest small amounts regularly in mutual funds, growing your money over time. With disciplined investing and the power of compounding, you can achieve your goal faster. Use a SIP calculator to estimate how much to invest monthly based on your car's cost and timeline. Start early, stay consistent, and enjoy driving your dream car without financial stress.

FAQs

  • What is a SIP for a Car?

    A SIP for a car is a systematic investment plan where you save monthly to buy a car in the future.
  • How does SIP for Car work?

    SIP for cars works by investing a fixed amount regularly in mutual funds to grow your savings over time.
  • Which mutual funds are best for SIP for Car?

    Hybrid or large-cap funds are best for SIP for cars as they offer stable returns for short to medium-term goals.
  • How much should I invest in SIP for Car?

    Use a SIP calculator to decide how much to invest based on your car's cost and the time you have to save.

˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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