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Meezan bank car financing: features and amenities

Flamboyant financing product Car Ijarah of Meezan Bank is Pakistan’s first interest-free finance based on the Islamic mode of Ijarah (leasing). This product is ideal for individuals who want to acquire a car without any interest.

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.

Key features
  • Lowest Up Front Payment
  • Rental Payment starts after Vehicle Delivery
  • Quick Processing Time
  • Minimum security deposit as low as 15 percent

Tracker: Tracker will be installed in all vehicles free of installation and monitoring cost.

Death Coverage: Free accidental death coverage of up to Rs 400,000.

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

Eligibility (salaried professionals)

Permanent employees: Three 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 percent.

In case of other loans, all monthly payments including proposed Ijarah rental combined not to exceed 50 percent 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 percent.

In case of other loans, all monthly payments including proposed Ijarah rental combined not to exceed 50 percent 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.

Ready-delivery terms & conditions

Residual Value Ijarah (For new cars only):

  1. 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.
  2. 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.
  3. 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.
  4. 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 & non commercial vehicles.

Vehicles for Residual Value Ijarah: Suzuki, Toyota & Honda.

Documentation Charges At actual
Free Accidental Death Coverage Up to Rs. 400,000/-
Rentals frequency Monthly Rentals payable through post dated cheques or debit instruction
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.

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

 

Car Ijarah options

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, 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 percent.

Imported car

Car Ijarah is not just available for new and used car financing but also for imported varieties of cars.

Special offers

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.

PMYBL car financing

To provide selected vehicles in shape of Car Ijarah by focusing on unemployed but educated youth looking for establishing new income source such as taxi, delivery vans and similar activities.

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 15 percent.

How is car Ijarah Shariah-compliant?

Car Ijarah, designed under the supervision of Meezan Bank’s 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 natures 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

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