Need suggestions on buying my car on CASH or on LOAN

[mygretgurl]

I've collected 10L in liquid which I plan to invest in the Indian equity market if I see some corrections.

I am also looking to buy a car (9L ) in near future. I have 2 scenarios to buy the car

• Do a 3L downpayment & take a loan with an EMI of 10K/mo for 7 years
• Self fund the entire purchase & do a SIP equivalent to the EMI

I also did a mathematical comparison between the above 2 scenarios

If I self-fund the car
A
Starting cash
₹1,000,000


B
Car full payment
₹900,000


C
Present Value
₹100,000
A-B

D
Monthly SIP (equity)
₹10,069
equivalent to car EMI

E
Annual interest
12.00%


F
Period (months)
84 (7 years)


G
Future Value ₹1,559,569
H
Original Investment
₹945,796
C+(D*F)

I
Capital Gains
₹613,773
G-H

If I finance the car
A
Starting cash
₹1,000,000


B
Car Downpayment
₹300,000


C
Present Value
₹700,000
A-B

D
Monthly SIP (equity)
₹0


E
Annual interest
12.00%


F
Period (months)
84 (7 years)


G
Future Value
₹1,614,706


H
Original Investment
₹700,000
C+(D*F)

I
Capital Gains
₹914,706
H-I

J
Loan repayment
₹845,819
at 7% for 7 years

K
Net Gain ₹768,887
G-J

Clearly on excel Self funding wins but I am a little doubtful about my approach. Am I missing any important factor and getting into the bias of self-funding? Please help me see-through.

I have taken the following assumptions

• Post-tax returns on equity will be 12% per annum
• Car loan interest is fixed at 7%