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 a car.
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 7 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.
|Vehicles||For Residual Value Ijarah: Suzuki, Toyota & Honda|
|Period of facility||1, 2, 3, 4, 5, 6 & 7 years|
|Advance Rent /Security deposit||Minimum 15% 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%
6 Years - 35%
7 Years - 30%
|Up - Front||Rs. 2,500/- Plus FED|
|Documentation Charges||At actual|
|Free Accidental Death Coverage||Upto Rs. 400,000/-|
|Rentals frequency||Monthly Rentals payable through post dated cheques or debit instruction|
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:
Upon completion of the Ijarah period and payment of all rentals, customer will have a option to purchase a car.
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.
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 15%.
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
Continuation of lease rentals in case of total loss or theft of vehicle
Takaful instead of 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.
|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||At Actual||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
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