Q. At what point will I be obliged to start making the Monthly payment?
- The Monthly payment will commence from the date on which the Vehicle will be delivered to the client, no matter whether the Customer has started using it or not.
Q. Will the rental differ for different phases during the Financing period?
- The rental will be revised on every Six months of Financing as per agreed formula mentioned in Payment Agreement.
Q. Is there a penalty for late payment of rent?
- The Bank gives its share to customer on rental basis under separate lease agreement wherein customer undertakes that if he/ she fails to pay rent on due date, he/ she will pay certain amount to charity through BankIslami. The charity is utilized by BankIslami for charitable purposes and is not included in the income of the bank.
Q. What happens if the Financed Vehicle stops functioning?
- This is similar to loss or theft of the asset. If the Vehicle has totally lost the function and no repair is possible, BankIslami is bound to terminate the partnership on the day on which such loss has occurred. However, if the loss is caused by misuse or negligence on part of the Customer, he/ she will be liable to compensate the bank for the market value of the vehicle, as it was immediately prior to the loss.
Q. If insurance is prohibited in Islam, how does BankIslami get its assets insured?
- BankIslami has arranged to have all of its vehicles insured under Takaful, the Shariah Compliant substitute of insurance.
Q. Which company covers the Takaful (Islamic Insurance) amount of the vehicle?
- Takaful coverage is provided by UBL Insurers (Pvt.) Limited, Adamjee Insurance Company Ltd- Window Takaful Operations (WTO), Jubilee General Insurance- Window Takaful, TPL Direct Insurance Ltd (WTO) and Century Insurance Company Limited (WTO)
Q. How much will I be charged if I choose to avail the premature payment option?
- In case of Premature termination, the purchase price will be calculated as follows:
- 1. Outstanding Unit price
- 2. Early Purchase additional price i.e. 5% to 8% of the outstanding unit price
- 3. The uncovered portion of the Takaful premium paid for the year
- 4. The unrecoverable portion of Registration charges
- 5. Tracker charges (if applicable)
Q. Which models are being offered by Bank for Auto Financing?
- All models which are locally manufactured and also Imported models which are Not more than 12 years old at the time of Maturity and 9 years old at the time of Financing.
Q. Does Auto Financing contract contain any hidden charges?
- The Auto Financing contract provides details of all charges taken in monthly payments. Other than defined in Auto Financing contract, there are no hidden or extra charges additionally taken by BankIslami.
Q. How is Auto Finance different in BankIslami as compared to other Conventional Banks or Leasing Companies?
||DM based Auto Financing
|Lease commences the day price is paid by the lessor, whether the lessee has taken delivery of the asset or not.
||At BankIslami, Bank and customer jointly purchase the vehicle and after acquisition Bank gives its share in the vehicle to the customer on rent. According to Shariah, rent is charged after the customer has taken delivery of the asset, not from the day the price has been paid.
|Liabilities of the Parties in case of Loss to the Asset
||Liabilities of the Parties in case of Loss to the Asset
|Asset Under conventional Auto Leasing, the customer bears all kinds of loss or damage to the vehicle, whether the loss caused due to his negligence or not.
||As BankIslami and Customer are the joint owner of asset, therefore, both are liable to bear all kind of loss or damage to the vehicle as per their ownership ratio in the assest unless the loss occured due to the negligence of either party.
|In case of total loss, any short fall in Takaful/Insurance claim has to be borne by the customer to compensate the total outstanding amount of the bank.
||In case of total loss, any short fall in Takaful/Insurance claim shall be borne both by the bank and customer as per their ownership share in the asset at the time of loss.
|All expenses like registration charges, insurance charges etc. are paid by the lessee.
||Being joint owner of the vehicle, principally Bank and Customer are liable to share the expenses like registration, takaful cost etc. However as Bank pays the total expenses, therefore, such expenses are accounted for while determining the rental amount.
|Penalty on Late Payment:
||Penalty on Late Payment:
|Penalty charges exist on late payment. These are taken as income.
||Bank gives it share to customer on rental basis under separate lease agreement wherein customer undertakes that if he fails to pay rent on due date, he will pay certain amount to charity through Bankislami. The charity is utilized by Bankislami for charitable purposes and does not include in the income of the bank.
|Termination of Lease
||Termination of Lease
|Lessor has power to terminate lease unilateral without any reason.
||Either party can terminate the lease contract as per the terms of the agreement.
Q. After expiry of the Financing period, can the vehicle be transferred to me?
- After the Gradual sale of Musharakah units by Bank to the client on periodic basis, you become the sole owner of the asset at the end of the financing tenure.
Q. Which mode of Financing is currently being used by 'Islami Auto Finance'?
- The mode of Financing currently used by 'Islami Auto Finance' is 'Diminishing Musharakah' mode.
Q. Who can apply for Auto Financing facility?
- 1. Salaried Employees
2. Self-Employed Professionals (SEP's)
Q. What is the minimum and maximum Financing limit on Auto Finance?
- The Financing limit on Islami Auto Finance is:
• Minimum Financing Amount: Rs. 250,000/-
• Maximum Financing Amount: Rs. 10,000,000/-
Q. What is the minimum and maximum Age limit at which one can apply for Auto Finance facility?
- For Salaried professionals:
• Minimum Age limit: 21 years (At the Time of Booking/ Financing)
• Maximum Age limit: 60 years (At the Time of Maturity)
For Businessmen/ Self Employed Professionals (SEP's):
• Minimum Age limit: 21 years (At the Time of Booking/ Financing)
• Maximum Age limit: 65 years (At the Time of Maturity)
Q. What is the Customer's Contribution for Auto Finance facility?
- The Customer can contribute a minimum of 15% Customer equity up to a maximum of 90%
Q. What is the Financing Tenure for Auto Finance?
- The Tenure for availing Auto Finance facility is from 1 year to 7 years.
Q. What is the Age of Vehicle for financing Used Vehicle?
- Not to be more than 12 years old at the time of Maturity and 9 years old at the time of Financing.
Q. Which models of cars are being offered by Bank for Auto Financing?
- All models of cars which are locally manufactured and also Used/ Imported models which are Not more than 12 years old at the time of Maturity and 9 years old at the time of Financing.