Which option to go

[blackhawk385]

I have 2 options
1) buy a car from financial institution max 3 years old model or new, for which I decided Faw V2 2020
2) have 7.5 lacks max and buy any old model, for which there are several small cars including alto

which option is optimum, please suggest the car for both options

Thanks!

[syeddanishanwaar]

Obviously financing is a better option.

But make sure you go for Islamic finance.

I have read the terms of Islamic financing is a better option with many advantages for the owner.

[dr.salmanawan]

Go for Financing. But dont go for V2.

[horticulturalist]

What is islamic financing and how much more we have to pay the price of the car?

[syeddanishanwaar]

Islamic finance is based on Ijarah - rental payment. The bank buys the car and leases or rents the vehicle.

The main benefit of ijarah is that collateral is not involved. The entire risk is borne by the bank.

Other than that, it is hallal more of financing if the penalty payment in case of non payment is give to a charity as is the case with Meezan auto ijarah.

[tmuzammil05]

Bank financing is better option if you can pay the instalments.
Lets suppose after including the markup and interest , you are getting the car of 28 lacs in 32 lacs and your instalment plan will be of 5 years then even after 3 years the price of newer model will have gone up by atleast some 1.5 million.
After 3 years you can sell your bank leased car and give the remaining instalments to bank and you will still be in profit.
So bank financing is a better option if you can pay the instalments.

[tmuzammil05]

There is nothing such as islamic financing as it includes interest. Putting the Halal sticker on pork will not make it Halal.

[syeddanishanwaar]

You are absolutely right. Many banks such as Dubai Islamic, SCB, HBL offer Ijara schemes that don't qualify as a pure Islamic interest fre product. The late payment terms of these banks are Riba.

But I have conducted research and based on my knowledge Meezan Bank does offer pure Islamic based financing that meets the shariya criteria even of wahabi Saudi scholars.

[syeddanishanwaar]

You also get ownership of the car with Islamic financing. But the bank assume the risk of loss that is a big plus as compared to interest based financing. It is becoming popular in Dubai for the same reason.

[tmuzammil05]

You maybe right but I cannot recommend this to anyone as Halal because you don’t know what their policy turns out to be later

[syeddanishanwaar]

Agreed. But with Meezan Islamic ijara as opposed to conventional car financing there is a significantly less risk of eating (burning) rocks in the hereafter which is the pinishment for consuming Riba.

Plus it is not a loan. It is a leasing agreement.

So, there is no risk of the bank reposessing the car due to nonpayment. Only penalties are charged.

Since it is not a loan, you won't have to answer for it in the hereafter in case of not paying it due to financial reasons or death. Our prohet Muhammad (Peace be upon him) refused to offer janaza of an indebted person.

Remember Allah Almighty has said in AlQuran that whoever consumes Riba is waging war against Him and His prophet (Peace be upon him).

[horticulturalist]

Does meezan bank car financing support all new vehicles, or some?

[syeddanishanwaar]

Meezan bank offers car ijarah for locally assembeled new cars. It also offers ijarah for both imported and local used cars.

You can find more about it here.

https://www.meezanbank.com/car-ijarah/

[blackhawk385]

thank you guys, but can you suggest me car with good fuel average for both options?

[blackhawk385]

why? and can you suggest me car for both options? fuel efficient

[tmuzammil05]

There is less risk of eating burning rocks but you cannot say that there is no risk. If you can say that then let me know so that there can be a clear difference. It can only be binary