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Car Ijarah

Meezan Bank provides Shariah Compliant financing solutions for individuals.

As a step towards Meezan Bank’s mission to provide a one-stop shop for innovative value-added Shariah compliant products, Meezan Bank’s Car Ijarah unit provides car financing based on the principles of Ijarah and is free of the element of interest.

 

Car Ijarah is Pakistan’s first Interest Free car financing based on the Islamic financing mode of Ijarah (Islamic leasing). This product is ideal for individuals looking for car financing while avoiding an interest-based transaction.

 

Meezan Bank’ Car Ijarah is a car rental agreement, under which the Bank purchases the car and rents it out to the customer for a period of 3 to 5 years, agreed at the time of the contract. Upon completion of the lease period the customer gets ownership of the car against his initial security deposit.

 

Special Offer - Residual Value Ijaraah with Indus Motors

Meezan Bank Car Ijarah Introduces Residual Value Financing enabling customer to afford luxury with economy, where the customer can enjoy the benefits of eased rental.

Car Ijaraah also features Used Vehicles!

In addition to leasing of new cars, Meezan Bank also provides the unique opportunity of leasing second hand, both locally assembled and imported vehicles. This feature is specifically designed as a highly economical option. The Used Car Ijarah facility is made available at a minimum-security deposit as low as 20%. Financing of used cars are subject to a selection criteria.

Key Features of Car Ijarah

  • Low monthly rental
  • Rental paid after delivery, not in advance
  • Fastest processing and delivery
  • Tracker option available
  • Minimum security deposit as low as 10%*
  • All new, used, local, imported and luxury vehicles can be financed

 

* Conditions apply

Apply Now

 

 

Car Ijarah, designed under the supervision of Meezan Banks Shariah Supervisory Board, is unique to car leasing facilities provided by other banks. 

 

  • Rights & liabilities of Owner v/s User

An Islamic Ijarah is an asset-based contract, i.e. the Lessor should have ownership of the asset during the period of the contract. Under Islamic Shariah, all ownership related rights and liabilities should lie with the owner while all usage-related rights and liabilities should lie with the user. A conventional lease contract does not distinguish between the nature of these liabilities and places all liabilities on the user of the asset, which is contradictory to Islamic Shariah.

Under Ijarah, all ownership-related risks lie with the Bank while all usage related risks lie with the user, thus making the Lessor the true owner of the asset and making the income generated through the contract permissible (Halal) for the Bank.

 

  • Continuation of lease rentals in case of total loss or theft of vehicle

If the leased vehicle is stolen or completely destroyed, the conventional leasing company continues charging the lease rent till the settlement of the Insurance claim. Under the Islamic system, rent is consideration for usage of the leased asset, and if the asset has been stolen or destroyed, the concept of rental becomes void. As such, in the above-mentioned eventualities, Meezan bank does not charge the lease rental.

 

Legally (in accordance to Pakistan’s Law and Regulations), it is required for all leasing entities to insure the leased assets. As such, Meezan Bank insures its leased assets. Meezan Bank insured its assets through Takaful only, which is the Islamic product for insurance.

 

  • Permissibility for Penalty of Late Payment of Rent under Islamic Shariah

In most contemporary financial leases, an extra monetary amount is charged, in their income, if the rent is not paid on time. This extra amount is the considered as Riba and is Haram. Under Ijarah, the Lessee may be asked to undertake, that if he fails to pay rent on its due date, he will pay certain amount to a charity, which will be administered through the Islamic Bank. For this purpose the bank maintains a charity fund where such amounts may be credited and disbursed for charitable purpose.

 

In addition to leasing of new cars, Meezan Bank also provides the unique opportunity of leasing second hand, both locally assembled and imported vehicles. This feature is specifically designed as a highly economical option. The Used Car Ijarah facility is made available at a minimum-security deposit as low as 20%. Financing of used cars are subject to the following Selection Criteria.

 

  • The second hand car selected should not be more then twice registered.
  • The vehicle should not be older than 5 years.
  • The minimum security deposit for a vehicle up to 2 years of age is 20%, while minimum security deposit for a vehicle over 2 years of age is 30%.
  • At the time of maturity of Ijarah agreement, the vehicle should not be more than 8 years old. This means that if a car is 5 years old, the Car Ijarah tenure is not more than 3 years and if its 4 years old, the tenure may be set for a maximum 4-year term.
  • Second hand vehicles selected should not be worth more than Rs. 1.5 million and less than Rs. 250,000/-. Meezan Bank will have the vehicle valued by an independent valuation company accordingly.

 

You can enjoy the benefits of Car Ijarah if you:

 

  • Are a salaried individual/ self-employed professional/businessman
  • Have a net take home income exceeding three times your monthly rental
  • Have two years working / professional / business experience
  • Are working with your present employer for at least six months (for salaried individuals)

 

 

Required Documentation

If you meet the requirements and wish to apply for Car Ijarah, simply fill out an application form and bring the following documents to your nearest Meezan Bank branch.

 

  • Application form duly filled and signed by the applicant
  • Copy of CNIC
  • One recent passport sized photograph
  • Any paid utility bill (Electric/Gas/Water) received at the residential address
  • Original or certified copy of Recent Pay slip (for Salaried Individuals only)
  • Last Six Month Bank Statement
  • Specimen signature card duly signed & stamped by the bank
  • Copy of Rent Agreement (if applicable)

 

To apply for Meezan Bank’s Car Ijarah, fill out a customer application form (available at any Branch), attach the required documents and get your financing approved in a 1-2 working days.

 

 

Processing & vehicle valuation charges

Domestic Vehicles - New

Cost of Vehicle
Charges
Amount (PKR)
Less than 1.00 million (999,999/-)
Processing
4,000/-
Greater than 1.00 million
Processing

5,000/-

Domestic Vehicles - Used / Imported

Cost of Vehicle
Charges
Amount (PKR)
Less than 1.00 million (999,999/-)
Processing
3,000/-
Valuation
1,500/-
Total
4,500/-
Between 1.00 million & 1.5 million
Processing

4,000/-

Valuation
1,500/-
Total
5,500/-
Note: Valuation changes for vehicle greater than 1.5 million will be charged at actual. Processing charges will remain unchanged.

Commercial Vehicles - New

Cost of Vehicle
Charges
Amount (PKR)
Less than 1.00 million (999,999/-)
Processing
4,000/-

Out Station Verification Charges

Cost of Vehicle
Charges
Amount (PKR)
Less than 1.00 million (999,999/-)
Processing
4,000/-

 

What is Residual Value Ijarah?

 

The value of an asset at the conclusion of the lease term or the price at which a fixed asset is expected to be sold at the end of its useful life is commonly referred as Residual Value (RV).

 

The average car buyer should take some effort to determine the estimated value of their new car in the future it would be best to know how much your car is worth in the future.

 

Based on the above definition, Meezan Bank Car Ijarah is introducing Residual Value Financing, enabling customer to afford luxury with economy, where the customer can enjoy the benefits of eased rental. A high residual value would result in a lower monthly lease.

 

 

 

Basic Features - Suzuki

Parameters

 

Details

 

Asset (vehicle)

For Residual Value Ijarah: Suzuki Mehran, Cultus & Swift Only

Ownership

Ownership lays with MBL

Period of facility

3, 4 & 5 years

Periodicity

Pre-determined monthly rentals

Advance Rent / Security deposit

Minimum 10% of cost of the vehicle 
Maximum 70% of the cost of the vehicle

Residual value (RV)

3 Year 5% to 55% 
4 Year 5% to 50% 
5 Year 5% to 50%

Processing charges

Rs. 3,000/-

Free Accidental Death Coverage

Upto Rs. 400,000/-

Mode of payment

Through post dated cheques

 



Basic Features - Indus Motors

Parameters

 

Details

 

Asset (vehicle)

All new variants of Toyota Corolla, Daihatsu Coure & Toyota Hilux)

Ownership

Ownership lays with MBL

Period of facility

3, 4 & 5 years

Periodicity

Pre-determined monthly rentals

Advance Rent / Security deposit

Minimum 10% of cost of the vehicle 
Maximum 25% of the cost of the vehicle

Residual value (RV)

3 Year 10% to 55% 
4 Year 10% to 50% 
5 Year 10% to 45%

Processing charges

Rs. 4,000/-

Free Accidental Death Coverage

Upto Rs. 400,000/-

Mode of payment

Through post dated cheques

 



Unique Selling Points

  • Pakistan’s first truly / completely
  • Shariah-compliant Car Financing Scheme
  • Ready delivery for all IMC variants
  • Lowest per month rent – Much lower than normal Ijarah
  • Lowest processing charges
  • Lowest up front payment
  • First rent after one month of delivery
  • Availability of Takaful
  • Free accidental death coverage upto Rs. 400k
  • Free Tracker (with installation & annual monitoring charges)
  • Competitive Service

Premature Termination

In case the customer wishes to terminate the Agreement before the agreed period, the customer will have an option to buy the vehicle on the agreed purchase price as mentioned in the Terminal-value schedule forming part of the lease documents. The purchase price takes into consideration the following amounts:

 

  • The principal outstanding as determined by the amortization schedule of the lease.
  • Residual value amount.

Maturity of RV Ijarah

At the end of the Ijarah period, Meezan Bank will make following offers to the customer:

 

Purchase Option: Customer will have an option to purchase the vehicle from MBL on pre-agreed Residual Value.
Return Option: Customer will have an option to return the vehicle to MBL (MBL conduct 3rd part vehicle assessment of condition)

 

Basic Features - Normal Ijarah (Indus)

 

Parameters

 

Details

 

Asset (vehicle)

All variants of Indus

Ownership

Ownership lays with Meezan Bank limited

Period of facility

3, 4 & 5 years

Periodicity

Pre-determined monthly rentals

Advance Rent / Security deposit

Minimum 20% of cost of the vehicle
Maximum 50% of the cost of the vehicle

Processing charges

Rs. 4,000/-

Takaful provisioning

4.25% with tracker

Tracker

Free Tracker (no installation & monitoring charges) to be installed in all vehicles.

Free Accidental Death Coverage

Upto Rs. 400,000/-

Mode of payment

Through post dated cheques

 


 

 

Unique Selling Points

  • Pakistan’s first truly / completely
  • Shariah-compliant Car Financing Scheme
  • Lowest per month rent
  • Priority delivery for all Indus variants (50%)
  • Lowest processing charges
  • Lowest up front payment
  • First rent after one month of delivery
  • Availability of Takaful
  • Free accidental death coverage upto Rs. 400k
  • Free Tracker (with installation & annual monitoring charges)
  • Competitive Service
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