|Auto Financing facility for||All locally manufactured new/used vehicles|
|Tenure of Auto Financing||1 to 5 years (for vehicles with up to 1000 cc engine capacity)
1 to 3 years (for vehicles above 1000 cc engine capacity).
|Customer Equity||Minimum 30% to Maximum 90%|
|Financing Amount||Minimum Rs. 250,000/- Maximum Rs. 3,000,000/-|
|Processing Charges||Application Fee (Upfront): Rs. 1,500/- per car (Inclusive of FED)
Documentation & Processing Fees (Prior to Disbursement):
|Tracker Installation||Tracker installation is Mandatory for All Vehicles and tracker shall be installed by BankIslami Pakistan Limited.|
|Takaful||Ranging from 1.85% to 2.8% (Rate may vary for special vehicles)|
Islami Auto Finance facility is based on Diminishing Musharakah under Shirkat-ul-Milk arrangement. Under this joint partnership agreement, BankIslami Pakistan Limited share in vehicle is represented by Musharakah units. The Bank will rent out its share in vehicle to you in exchange for periodical rents claimed. In addition to periodical rental payment, you will purchase BankIslami Pakistan Limited share (Musharakah units) on a periodical basis. Upon purchase of all Musharakah units, you will become the sole owner of the vehicle.
Diminishing Musharakah (DM) is a partnership transaction in which the partners agree to terminate Shirkat (partnership) gradually by means of purchase of one partner’s share by other partner.
Under Diminishing Musharakah financing, the Bank and its client participate in the ownership of an asset on the basis of ‘Shirkat-ul-Milk’ (i.e. Joint ownership)
A DM based Auto financing transaction comprises of mainly following three steps:
A DM Financing is a combination of Musharakah, Ijarah and Sale transaction. Therefore, all rules pertaining to Musharakah, Ijarah and Sale transactions are applicable to a DM transaction.
All the three transactions are independent and are executed through separate contracts.
To Understand the Difference between Diminishing Musharakah and Conventional Long Term Financing kindly click
|Income||No Minimum Income Requirement|
|Age Limit||For Salaried/ Businessmen/ Self Employed Professionals (SEP's)|
|Minimum 18 Year (At the time of Booking/ Financing)|
|Maximum 70 Years (at the time of Maturity)|
Documents Required:Download Document Checklist
Q. At what point will I be obliged to start making the Monthly payment?
Q. Will the rental differ for different phases during the Financing period?
Q. Is there a penalty for late payment of rent?
Q. What happens if the Financed Vehicle stops functioning?
Q. If insurance is prohibited in Islam, how does BankIslami get its assets insured?
Q. Which company covers the Takaful (Islamic Insurance) amount of the vehicle?
Q. How much will I be charged if I choose to avail the premature payment option?
Q. Which models are being offered by Bank for Auto Financing?
Q. Does Auto Financing contract contain any hidden charges?
Q. How is Auto Finance different in BankIslami as compared to other Conventional Banks or Leasing Companies?
|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?
Q. Which mode of Financing is currently being used by 'Islami Auto Finance'?
Q. Who can apply for Auto Financing facility?
Q. What is the minimum and maximum Financing limit on Auto Finance?
Q. What is the minimum and maximum Age limit at which one can apply for Auto Finance facility?
For Businessmen/ Self Employed Professionals (SEP's):
• Minimum Age limit: 18 years (At the Time of Booking/ Financing)
• Maximum Age limit: 70 years (At the Time of Maturity)
Q. What is the Customer's Contribution for Auto Finance facility?
Q. What is the Financing Tenure for Auto Finance?
Q. What is the Age of Vehicle for financing Used Vehicle?
Q. Which models of cars are being offered by Bank for Auto Financing?
Imported vehicles cannot be finance (as per SBP regulations).
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