Which bank is best for Car Ijarah in Lahore, Pakistan?

[amjad.afzaal]

Assalam o Alikum wr wb, I want to purchase a new honda city 1.3 ivtec prosmatic and want to use car ijarah service. Appreciate if anyone can guide me which bank is best for this service.

[sohelahmed]

nothing is islamic.....dont go for it....buy what you have in budget....

[hondacityjan17]

Every single banks loan dealing is fishy. They all have hidden costs doesn't matter how much they deny it.

If you book a car and delivery time is 6 months some banks will make you start paying the installments including insurance even though you have not received the car and those who start charging you once your car is delivered they will add an additional interest rate in installments.

So from Islamic point of view I doubt if any of them is Halal ( figured out on the day of delivery of my car while signing papers at the bank)

If possible than avoid the banks

[amjad.afzaal]

@hondacityjan17 when and which bank you used to buy a car? Well there is some misconception among the people regarding ijarah model. This model is different than classical interest rate model as in it bank owns a car and rent it out to you for some fix years and after that either car is gifted to you or you can return the car. Where as in classical interest rate model you give interest on actual car amount. BUT the interesting fact here is that car cost to you is almost same in both cases. For example if one used ijarah model and pay rent for seven years for a car say 20,00,000 is total cost he bear for a car. So in classical interest rate model same car will also cost him around 20.00.000. Hence due to this most people think that there is nothing Islamic and it is not Halal. The only difference b/w both model is term and conditions which makes them either halal or haram.

As per my searching in Ijarah model they don't charge for insurance. I am pretty new to the cars. Infact this will be my first ever car if I bought

Hence I want discuss , research and conclude which thing will best suits me.
By the on different note which automatic car has best fuel consumption?

[hondacityjan17]

Brother I contacted bank Alfalah Islamic in October 2016 and they told me that the paper work and approvals will take only 10 days but it took then 2.5 months to finally finish it and booked my car in start of January 2017. I booked Aspire 1.5 MT and got the delivery on 1st Feb 2017.

As for the Ijarah model, brother calculations of the monthly rental are based on the similar model as that of conventional. Plus the fact that they booked my car on 6th Jan and delivery of the car was on 1st Feb so for a wait of 25 days they added further markup of 131 rupees to my monthly installments. So makes me wonder how Islamic that is.

As for gifting the car at the end, actually bank charges you a down payment or in case of Ijarah security fee which is like 20, 25, 30 etc percent what ever you chose. once the payment period is over you have a choice to buy the car for the same amount as that of the security fee or you can choose not to buy the car and get your security money back from bank.

As for insurance, if you can find a bank that does provide Ijarah services and do not charge insurance do let me know because as per my research and experience there is no bank that allows you to take the car out of the showroom without having the car insured first. You do have the option of going for the tracker services or skipping it.

[hondacityjan17]

As for the fuel consumption in automatic cars, hybrid Toyota cars are the best e.g. Aqua, Prius, even Toyota Crown hybrid does 17-18kmpl in city with AC

[amjad.afzaal]

Well bro thanks for details that is look fishy - you didn't ask them why they added 131 RS?

I was advised to deal with Meezan Bank as it is under re-known Islamic Scholar

[hondacityjan17]

Those 131 Rs were charged as "Profit" or in simple words interest because during the waiting period bank had made the full payment to Honda but did not charge the client anything. So for that wait period this additional interest rate was charged. Paper work containing that amount is presented the day car arrives at the showroom. By then you have already paid the down payment and if you want to back out you can't and have to accept it.

As for the Meezan Bank, brother they are all the same. Every single one of them has different method to hide the info from the client and later charge them a ton of money through hidden costs

Ask your bank to give you in writing that there are no hidden charges

[amjad.afzaal]

Thanks brother for your precious advice.

Did you use AT Honda city 1.3 and 1.5? What is the fuel consumption difference b/w them? From Pakwheels it seems both 1.5 and 1.3 AT have same fuel avg. Also what about MT Honda city 1.3 and 1.5 fuel avg? Which one is good? MT or AT? (I have good practice on AT but MT I didn't run).
One more question what is difference b/w aspire and non aspire model?

Apologies for bundle of questions but since I am new hence want to know. Appreciate your response!

[hondacityjan17]

No problem happy to help

I have not experienced AT myself but my friend recently got 1.3l AT city. Fuel consumption is not good it is doing around 9kmpl in Lahore with AC. I have heard 1.5l AT might have better fuel average. As for the driving, you have the luxury of not having to change the gears but personally I did not like the acceleration or the general response of engine when you push the paddle.

I have driven MT and personally have 1.5l MT City. Fuel consumption is 11-11.5 kmpl in with AC in Lahore and 15 on motorway. To me response of 1.5 in terms of acceleration is amazing. Fuel consumption of 1.3 is slightly better than 1.5 but acceleration of 1.5 is a lot better.

As for differences between Aspire and non aspire
Following are the items which are in Aspire but not in non Aspire
1- Navigation with DVD player and reverse camera
2- rear doors speakers
3- fog lamps
4- leather seat covers
5- chrome knobs
6- ECO mode indicator
7- alloy rims
Rest is all the same I.e. same engine same body and suspension etc.

[ashbal]

Bank al habib lowest interest lowest insurance and the best option for ballon payments...but you cant finance for more than 5 years

[amjad.afzaal]

Thanks a lot!

[amjad.afzaal]

@ashbal Want to go with Islamic car ijarah model not the classical interest rate model

[4Soul]

ECO meter is availabe in standard 1.5

[hondacityjan17]

Okay. I did not know that

[darkfort]

Meezan bank car ijarah is a good option.. i trust the fatwa by brother of mufti taqi usmani who is also a mufti and head of sharia board of meezan bank... so to me its halal ...

[pwuser147919061283]

According to my research, there is no bank in Pakistan even conventional or Islamic provide "Halal" Car financing. Because at the time of contract signing they have conditions which directly contradicted with Sharia, So I suggest don't go for Car finance.

[krafiq]

A very novice question. The onus of insurance is always on the owner. So if bank is the owner and I am only paying rentals then why should I insure the car out of my pocket. It's like saying I get a flat on rent but the flat owner asks me to pay for the insurance....