Meezan Bank Car Financing – You & your dream car, now secure!
Historically, car financing has struggled to gain traction in Pakistan. Buyers prefer to pay upfront for motor vehicles, which, due to low depreciation, are considered more like investments. Additionally, the penetration of banking services in Pakistan, to begin with, is incredibly low.
Meezan Bank has been working on changing the perception of banking in Pakistan. Pakistan’s first Islamic bank started operations in 2002 with the vision to “establish Islamic banking as banking of the first choice.”
Meezan Bank was named the best bank of Pakistan in 2018. With over 800 branches in more than 240 cities of Pakistan, Meezan Bank offers a wide range of Islamic banking products and services. One of the bank’s flagship products is Meezan Bank Car Ijarah.
Based on the Islamic banking principle of Ijarah (leasing), it is the first Islamic car financing service in the country.
How is Meezan Bank Car Financing Different?
As an Islamic bank, Meezan Bank’s organizational structure is different from conventional banks. Alongside a traditional management structure, there is also a Shariah Supervisory Board that assists and overlooks banking procedures and operations.
Therefore, all banking products are approved by Shariah advisors and issued a confirmation of compliance with Shariah Law (Fatwa).
Meezan Bank’s Car Financing is different from conventional car financing because of several key differences:
- The bank maintains differences between the owner’s liability (bank) and the user (consumer).
- The vehicle is insured on takaful instead of conventional car insurance.
- In case of loss or damage to the vehicle, payments do not continue.
- Late payment penalties are not charged; instead, donated to charity.
Types of Car Ijarah
There are two types of car financing options available that differ by the result at the end of the financing period.
Firstly, the regular Ijarah has comparatively higher per month charges, and the car is gifted to the consumer at the end of the term. Secondly, in Residual Value Ijarah, costs are lower per month, and the vehicle is returned to the bank at the end of the period.
In essence, the former is full financing where the consumer owns the car at the end of tenure while the latter is leasing a car for a set period.
Eligibility for Car Financing
Both salaried and business individuals are eligible for Meezan Bank‘s Car Financing. Details and requirements outlined below:
| Salaried Individuals | Business Individuals |
|---|---|
| Permanent Employees: 3 months in current job with a minimum 2 years continuous employment history. | Minimum Experience: 2 years continuous involvement in current business/industry |
| Contractual Employees: 6 months in current job with a minimum 3 years continuous employment history. | Position: Proprietor, partner or director |
| Net Income: In excess of 2 times the monthly rental | Net Income: In Excess of 2 times the monthly rental |
| Spouse’s Verifiable Income: Clubbed to an extent of 50% | Spouse’s Verifiable Income: Clubbed to an extent of 50% |
| Other Loans: Combined monthly income of other loans plus Ijarah to not exceed 50% of net income | Other Loans: Combined monthly income of other loans plus Ijarah to not exceed 50% of net income |
Car Financing Process
Meezan Bank advertises a straightforward and quick application process for car financing.
It should be noted that this processing timeframe is for new cars. In the case of financing a used car, the time may change due to additional processes.
The required documents are as follows:
| Salaried Individuals | Business Individuals |
| Signed application form | Signed application form |
| Copy of recent pay slip/certificate | Proof of business ownership |
| Copy of last six months bank statements | Copy of last six months bank statements |
| One recent photograph | One recent photograph |
| Specimen Signature Card on bank format | Specimen Signature Card on bank format |
Meezan Bank has some of the lowest processing charges for this type of product. The full breakdown is outlined below:
| Type of Charges | Salaried Individuals | Business Individuals |
|---|---|---|
| Processing Charges | PKR 2,500 | PKR 2,500 |
| FED on Processing Charges | PKR 325 | PKR 325 |
| Income Estimation Charges | Not Applicable | At Actual |
| Documentation Charges | At Actual | At Actual |
| Old Vehicle Calculation Charges | PKR 2,000 | PKR 2,000 |
Meezan Bank Car Financing Promotion
With car prices at an all-time high and car sales down due to the pandemic, Meezan Bank has introduced a limited time offer to incentivize car financing.
When you finance a car from Meezan Bank, you will also get free health coverage worth PKR 200,000 per year. Additionally, the Withholding Tax will be borne by the bank and there are no upfront processing fees. Lastly, in case of the death of a customer, their legal heirs will be gifted the car.
Some terms and conditions to note:
- Only the original customer eligible
- Health coverage validity is till the age of 60
- Death coverage will not be provided to customer aged 55 or above
- Health coverage is applicable for hospitalization only
- No additional charges for early termination after receipt of 12 monthly payments
- Promotion valid till the 31st of December 2020
In the space of Car Ijarah, Meezan Bank is the best option to opt for. Additionally, with this promotion in place, the decision to opt for Meezan Bank is even more enticing.
If you’re looking to buy a used car and would like to pay upfront, always get the car inspected. To read our pick of top car inspection services, click here.
Find more bank offers and card discounts on Peekaboo Guru!
