Be careful when you lease from a bank

[tauseefshazad]

My recent experience with car leasing has not been very good.

I calculated bank lease installment plan on PakWheels. I Selected Dubai Islamic Bank for Car Lease. Their representative called me 3rd day and gave me a quote higher than the one we see on calculator. The bank rate was 17% on quote. I accepted the quote and proceeded with leasing. In the mean time I Selected a car and paid token money to car owner. My loan was approved in 10 days and the bank called me to sign lease agreement. The presented me the agreement and guess what... They had applied rate of 21.5%!!! I wanted to tear that contract then and there. But since I had already paid token money for Car, I would have lost it if I backed off from that deal. After some heated discussions they ended up revising it to 19.5%. And I had to accept the deal.

This is how they cheat people. Beware of this bank. They cheat in the name of Islam!!!! You are better of with other commercial banks who do not cheat you like this.

[arslansarwar]

If you can prove the qoute of 17% in court, go on and sue them.

[hyder_m29]

You need to pay token before signing the agreement? Is the token for the car or the agreement?

[azfarnb]

In case of buying used car and having it financed from the bank. The token is for the gari you like.

[qwertypoiu]

Pakwheels calculator is not accurate

[tauseefshazad]

It is not PakWheels only. Calculator for most banks is inaccurate even on their websites. I can tell you from my experience now.

It is like a car manufacturer publicizing a car for 2 million and when you reach out to buy the car, they charge you 2.4 million instead.

However I am surprised that Noone raised voice against this.

[tauseefshazad]

I have the quote with me and purchase order with me. The question is should I spend time and money on legislation now?

The post is to warn everyone on forum only. I may be able to pay extra cash to bank. But a lot of people will be or maybe are tricked into such deals by this so called Islamic bank.

[qwertypoiu]

Can you post here showing details of course delete your personal info from it.

Instead of litigation maybe complain to bank with proof of documents maybe they give good settlement. Later you can complain to statebank

[arslansarwar]

You don't need to spend any money.
Complaint at citizen portal and drop one complaint at state bank of Pakistan.

[geek.maan]

you can also file your complaint with Banking Mohtasib i guess

[khurem]

Islamic banks do that as they hide the actual interest rate they charge (sorry not interest as in their jargon they call it 'profit' rate).

However whether it's an Islamic or a Commercial bank, never make up your mind on the rate the sales person quote, always ask them details about that rate, is it the simple rate or the IRR, which is the actual rate that you will be paying.

Rather than relying solely on bank's word, better is to always calculate the IRR yourself. All you need is the fixed installment amount that you need to pay each month, the loan amount and the tenor of loan (in months). Put it in MS Excel by using the 'Rate' function and you will get the monthly IRR that multiplied by 12 would give you the actual rate charged by bank.

Also I can tell you there's no point in complaining to Banking Mohtasib or legislation. But yes you can just lodge your complaint of miscommitment made by DIB in SBP website. All banks fear SBP a lot and even just this threat may make the bank change a lot of things in your favor.

[capsat]

You did a blunder by using PAKWHEELS calculator. With assumption you made 2nd mistake without visiting the bank. Banks always provide a draft document for review by the person applying for lease / loan with clear term and %age charged with approximate digit figures.

There is nothing wrong bank has done, it is your very own lethargy which lead you to such situation, seriously you should be sorry about that instead of blaming bank.

Islamic car financing has nothing to do with the name Dubai Islamic Bank as name,. Islamic banking branches clearly operate with boards mentioning Islamic Banking Branch over the entry gate by State Bank Law -

[crude101]

yes please rip them off !

[crude101]

its for the car. to the person you are buying from !

[unknown_one]

This post was flagged by the community and is temporarily hidden.

[SER_GTR]

i guess your one visit to banks meezan/dubai islamic could have saved all this loss and hassle instead of doing it over PW's as third party involved....!

[capsat]

almost every Pakistani Bank have Islamic banking branches and foreign bank Islamic Banking Branches mention it over the entry gate. It is the lethargy which make plenty suffer.

[KamranAslam]

My classmate is one of the well-known officer at DIB and when ever we meet I quote him :- ...DIB = RIP

[IceCold]

Can anyone tell how is bank Al Habib? They gave me insurance rate of 3.65 with tracker. I told them it's too high and dropped the idea in favor of bank alfalah which was giving 2.5 without tracker and an option of RV. Later bank Al Habib called and said we will revise insurance rate to 2.5 without tracker. Problem was that I wanted to get it leased for 5 years while in bank Al Habib case they were pushing for 7. Now with reduce insurance I am able to get it financed for 5. I am using credit cards so my DBR is high.

[sfjsag]

Well Islamic banks usually offered Islamic financing and they dont offer any fixed quote/ rate and if you calculate the actual cost it is somewhere between 30-50% extra than actual cost of car.
For conventional banks, it depends on KIBOR which is set by state bank, and the interest rate is pretty much fixed between KIBOR+3 upto KIBOR+6 depending on individual banks. Now if you get a quote and apply, and KIBOR at the time of car booking is used in lease agreement so it can change but yes, any sort of crookery can be expected here.