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What is Meezan Car Ijarah?

Car Ijarah is Meezan Bank’s car financing product and is Pakistan’s first Interest-free car financing. It is based on the Islamic financing mode of Ijarah (leasing). This product is ideal for individuals who want to get interest-free financing for acquiring locally manufactured /assembled vehicles.


Car Ijarah works through a car rental agreement, under which the Bank purchases the car and rents it out to the customer for a period of 1 to 5 years, agreed at the time of the contract. Upon completion of the Ijarah period, the vehicle will be sold at a token amount or gifted to the customer.

Key Features

Lowest Upfront Payment

Lowest Up Front Payment

Rental Payment starts after Vehicle Delivery

Rental Payment starts after Vehicle Delivery

Quick Processing Time

Quick Processing Time

Minimum Security Deposit

Minimum security deposit as low as 30%*

WHT

Meezan Bank will bear W.H.T (With Holding Tax) on purchase of vehicle

RDA Customer

Roshan Digital Account Holders

Eligibility Criteria

  • Financing facility for new locally assembled and Complete Built Up (CBU) vehicles
  • Maximum financing of up to 10 million as the net financing amount. Only one vehicle will be allowed.
  • Maximum ijarah tenure: Upto 7 years.
  • Security deposit / Advance rental: Minimum 15% of the cost of vehicle and 25% of the cost of vehicle for Completely Built Up (CBU) / Sport Utility Vehicle (SUV) for salaried professionals.
  • Security deposit / Advance rental: Minimum 25% of the cost of vehicle and 35% of the cost of vehicle for Completely Built Up (CBU) / Sport Utility Vehicle (SUV) for businessman / self-employed professional.
  • Both data check & e-CIB should be clear and must not have default / overdue at the time of case approval
  • Local Credit Bureau check (Electronic Credit Information Bureau & Data Check) of main applicant & nominee will be obtained. Moreover, bureau of country of stay will also be obtained on best effort basis.
  • The facility is available for all Roshan Digital Account holders including foreign currency account holders
  • No processing charges. Documentation and security perfection charges are to be paid at actual by the applicant at the time of disbursement of the case
  • Monthly Rentals are to be paid through direct debit instructions from PKR Roshan Digital Account
  • The vehicle would be delivered to the nominee / co-borrower (blood relative – father / mother, son / daughter, brother/ sister or spouse residing in Pakistan) of applicant
  • The maximum age of authorized nominee / co-borrower should not be above 70 years at the time of Ijarah maturity.
  • In case of a non-filer, 4 % Advance Tax on the Cost of Vehicle will be applicable at the time of vehicle disbursement.
  • Minimum age limit of applicant should be 25 years
  • Maximum age limit of applicant at time of maturity should not exceed 60 years for salaried professional.
  • Maximum age limit of applicant at time of maturity should not exceed 65 years for businessman / self-employed professional
  • Minimum 2 years continuous employment history in current employment for salaried professionals.
  • Minimum business experience 3 years continuous involvement in current business / industry for businessman / self-employed professional.
  • If the applicant has availed other financing facilities, all monthly repayments combined, including proposed Ijarah rental, should not exceed 40% of net / take-home income

Product Profit Rates*

Fixed Profit Rates
Financing Tenure 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year
For Non Lien  Based 22.26% 18.96% 18.40% 18.00% 17.08% 16.75% 16.50%
Above mentioned rates can be revised based on Deposit and PKRV rate at time of disbursement
Variable Profit Rates
For Non Lien  Based 24.49%

*Above mentioned profit rates are without Takaful and Tracker

Takaful Rates

Tracker Value Added Services
EFU 1.99% Accidental death Coverage up to PKR 2.5 Million
1.99%
Adamjee 1.99% -
3.50% - Accidental death Coverage up to PKR 2.5 Million
- Health insurance plan up to 20.00% of vehicle or PKR 500,000 whichever is less
- Online Medical consultancy
- Travel Takaful Plan up to USD 50,000

Required Documents

Salaried Individuals

  • Latest employment certificate including the date of joining
  • Last six-month credited salary bank statement
  • Nominee CNIC copy
  • Name of employer’s HR representative with mailing address
  • Credit Bureau Report of stay country

Businessman

  • Valid business proof
  • Last six-month verified bank statement through embassy
  • Nominee CNIC copy
  • Credit Bureau Report of stay country
  • In case of remittances income, last six months bank statement of remitter would be required

RDA Customer Application Form

Disclaimer: Due to the current uncertain market conditions and production issues, the delivery of vehicles may be delayed. Any price increase shall be applicable at the time of delivery.

Who is Eligible for Car Ijarah?

Salaried Professionals

Salaried Professionals

  • Permanent employees : 3 months in current job with a minimum 2 years continuous employment history
  • Contractual employees : 6 months in current job with a minimum 3 years continuous employment history.
  • Net take home income : In excess of 2 times the monthly rental (inclusive of takaful)
  • Spouse’s verifiable income : Clubbed to an extent of 50%.
  • In case of other loans, all monthly payments including proposed Ijarah rental combined not to exceed 40% of net / take home income
  • Both data check & e-CIB should be clear and must not have current default / overdue at the time of case approval
Self-Employed Professionals

Businessmen

  • Minimum experience : 2 years continuous involvement in current business / industry
  • Position : Proprietor, partner or director (In case of partner or director, percentage of sharing / holding will be applied)
  • Net take home income : In excess of 2 times the monthly rental (inclusive of takaful)
  • Spouse’s verifiable income : Clubbed to an extent of 50%.
  • In case of other loans, all monthly payments including proposed Ijarah rental combined not to exceed 40% of net / take home income
  • However upto 50% net/ take home income will be allowed for locally manufactures or assembled vehicles of up to 1000 CC engine capacity.
  • Both data check & e-CIB should be clear and must not have current default / overdue at the time of case approval

Note: In line with State Bank of Pakistan's regulatory requirement, negative history (i.e. overdue/ late payment/ write-off/ waiver) of consumer/individual customers will be reflected in e-CIB reports for two years after settlement.

Residual Value Ijarah

(For both new and used cars)
(Residual Value Ijarah is not being offered under Meezan Car Ijarah for Roshan Digital Account holders)

In a regular Ijarah model, the customer does not have to pay any money to the Bank for acquiring the car upon completion of the Ijarah period.

In the Residual Value Ijarah model, the monthly rentals are significantly lower than the regular Ijarah model because here the customer agrees to pay a certain sum to the Bank for acquiring the car upon completion of the Ijarah period. The customer also has the option that instead of paying the Bank and acquiring the car upon completion of the Ijarah period, he can simply return the car to the Bank.

This model enables the customer to take a car on significantly reduced rental. Customer can also, depending on his monthly rental payment ability, get a much higher-value car than he can under the regular Ijarah model.

Special Offer - For all new locally assembled & noncommercial vehicles

Vehicles For Residual Value Ijarah: all new locally assembled
Period of facility 1, 2, 3, 4 & 5 years
Advance Rent /Security deposit Minimum 30% of the cost of the vehicle (Only for Locally Assembled Vehicles)
Maximum 50% of the cost of the vehicle
Residual value (RV) 1 Years - 60%
2 Years - 60%
3 Years - 50%
4 Years - 50%
5 Years - 40%
Up - Front Rs. 2,500/- Plus FED
Documentation Charges At actual
Rentals frequency Monthly Rentals payable through post dated cheques or debit instruction
Overall auto financing limits availed by one person from all banks/DFIs, in aggregate shall not exceed Rs. 3,000,000/- at any point of time.
30% security deposit with RV value up to 5 years will be applicable to local car manufacturers or locally assembled vehicles

Premature Termination

If 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 Ijarah documents. The purchase price takes into consideration the following amounts:

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

Maturity of RV Ijarah

Upon completion of the Ijarah period and payment of all rentals, customer will have a option to purchase a car.

Car Ijarah Options

Car Ijarah Products

  • New Car *
    Choose from a range of new models and be on your way to owning the vehicle of your dreams.
  • Used Car
    In addition to leasing of new cars, Meezan Bank also provides the unique opportunity of leasing second hand locally assembled 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 30%.

* New locally assembled cars i.e. Toyota, Honda, Suzuki and KIA are being offered to Roshan Digital Account holders under Meezan Car Ijarah

Used Car Financing

Meezan Bank also finances Used Vehicles through Car Ijarah!

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 30%.

How is Car Ijarah Shariah-compliant?

Download Fatwa

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.

Takaful instead of Insurance

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 insures 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.

How to get a car through Car Ijarah

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 minimal working time.

Required Documents

  • Application form duly filled and signed by the applicant
  • Copy of recent pay slip/certificate showing – For Salaried individuals.
  • Business Proof - such as bank certificate confirming proprietorship, NTN, business Association letter or tax return etc. is required - For businessman.
  • Copy of last six months bank statements
  • One recent photograph.
  • Specimen Signature card preferably on bank’s prescribed format

Note: Process mentioned above is not applicable under Meezan Car Ijarah for Roshan Digital Account holders

Use our Calculators to Compare Different Cars & Payment Plans!

Option 1

Add Calculator

Add Calculator

Note: Cars are being offered for a tenure of Five years under the name Regal Automobiles Industries Ltd.
Above mentioned calculator is not applicable under Meezan Car Ijarah for Roshan Digital Account holders.

Application Procedure

Fill out a customer application form (available at any Branch)

Download Form

Attach the required documents and submit your application

Get your financing approved in a 1-7 working days

Processing Charges

Type of Charges Salaried Businessmen
Processing Charges** - Up Front PKR 2,500 PKR 2,500
FED* on Processing Charges @ 13% to 16% PKR 325@13% PKR 325
Income Estimation Charges Not Applicable At Actual
Documentation Charges At Actual At Actual
Old Vehicle Valuation Charges PKR 2,000 PKR 2,000

*FED on Processing Charges 13% to 16% vary from Region Wise
**Processing charges are non-refundable

Note: Charges mentioned above are not applicable under Meezan Car Ijarah for Roshan Digital Account holders

Get Contacted By a Car Ijarah Representative

Fill out the form below and you will be contacted by a Meezan Bank representative.

Name *
Email
Phone Number *
City