Which funds should I invest in if I want to buy a luxury car?

2 min read | Updated on October 11, 2025, 13:21 IST

SUMMARY

Since a luxury car is a short-to medium-term goal, your investment strategy should focus on capital preservation and liquidity, not aggressive growth.

which funds to invest for buying luxury car

A luxury car purchase is generally a short- to medium-term investment objective. | Image: Shutterstock

It’s that time of year when the air is filled with lights, joy, and new beginnings. Dhanteras and Diwali have long been seen as auspicious occasions to make big, meaningful purchases, and for many, buying a luxury car is a dream they want to turn into reality during this festive season.

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But turning that dream into a plan needs smart financial planning. Since a luxury car is a short-to medium-term goal, your investment strategy should focus on capital preservation and liquidity, not aggressive growth. And because everyone’s timeline and risk appetite are different, the right choice of mutual funds must be personalized based on when you plan to make the purchase and how much risk you’re comfortable taking.

Which mutual funds should I opt for if I want to buy a luxury car?

Answered by: Swapnil Aggarwal, Director of VSRK Capital

A luxury car purchase is generally a short-to medium-term investment objective. As the emphasis is on having the money ready without depletion of capital, the investors must turn to relatively stable mutual funds.

For a very short term goal, liquid funds, ultra-short duration schemes, or money market schemes are the best bet due to the assurance of safety and easy withdrawal of money. If the goal is stretched over two to four years, conservative hybrid schemes can also be utilised, as these provide for modest growth while safeguarding against risk exposure to volatility.

In contrast to long-term objectives, where equity exposure can increase wealth, buying cars calls for assurance of returns and protection of the investment corpus.

Therefore, investors should avoid high-risk categories such as pure equity plans for such specific objectives. The best option, therefore, is to prioritize the liquidity and safety factor so that the money saved can be utilized efficiently at the time of purchase without the risk of fluctuations in the market.

Disclaimer: This article is written purely for informational purposes and should not be considered investment advice from Upstox. Investors should do their own research or consult a registered financial advisor before making investment decisions.