AL Meezan Bank

Car Financing
 As a step towards Meezan Bank’s mission to provide a one-stop shop
for innovative value-added Shariah compliant products, Meezan Bank’s
Car Ijarah unit provides car financing based on the principles of Ijarah
and is free of the element of interest.Ijarah means to rent out

 Car Ijarah is Pakistan’s first Interest Free car financing based on the
Islamic financing mode of Ijarah (Islamic leasing). This product is ideal
for individuals looking for car financing while avoiding an interest-
based transaction.

 Meezan Bank’ Car Ijarah is a car rental agreement, under which the
Bank purchases the car and rents it out to the customer for a period of
3 to 5 years, agreed at the time of the contract.
 Shariha Compliance
 Car Ijarah, designed under the supervision of Meezan Banks
Shariah Supervisory Board, is unique to car leasing facilities
provided by other banks. Rights & liabilities of Owner v/s User
 An Islamic Ijarah is an asset-based contract, i.e. the Lessor should
have ownership of the asset during the period of the contract.
Under Islamic Shariah, all ownership related rights and liabilities
should lie with the owner while all usage-related rights and
liabilities should lie with the user..
 Under Ijarah, all ownership-related risks lie with the Bank while
all usage related risks lie with the user, thus making the Lessor the
true owner of the asset and making the income generated through
the contract permissible (Halal) for the Bank.
 Permissibility for Penalty of Late
Payment of Rent under Islamic Shariah

In most contemporary financial leases, an extra monetary amount

is charged, in their income, if the rent is not paid on time. This
extra amount is the considered as Riba and is Haram. Under
Ijarah, the Lessee may be asked to undertake, that if he fails to pay
rent on its due date, he will pay certain amount to a charity,
which will be administered through the Islamic Bank. For this
purpose the bank maintains a charity fund where such amounts
may be credited and disbursed for charitable purpose.
 Used Car Financing

In addition to leasing of new cars, Meezan Bank also provides the

unique opportunity of leasing second hand, both locally
assembled and imported vehicles. This feature is specifically
designed as a highly economical option. The Used
Car Ijarah facility is made available at a minimum-security
deposit as low as 20%.
 Used Car Financing

 The second hand car selected should not be more then twice
registered.
 The vehicle should not be older than 5 years.
 The minimum security deposit for a vehicle up to 2 years of age is
20%, while minimum security deposit for a vehicle over 2 years
of age is 30%.
 Second hand vehicles selected should not be worth more than Rs.
1.5 million and less than Rs. 250,000/-.
 Residual Value of Ijarah

 The value of an asset at the conclusion of the lease term or the

price at which a fixed asset is expected to be sold at the end of its
useful life is commonly referred as Residual Value (RV).
 The average car buyer should take some effort to determine the
estimated value of their new car in the future it would be best to
know how much your car is worth in the future.