One of the student of knowledge told me mufti taqi usmani is an expert in this and he is the highest ranked scholar in your country and that’s enough for am Aami to know. Below is the nature of their agreement 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 1 to 5 years, agreed at the time of the contract. Upon completion of the lease period the customer gets ownership of the car against his initial security deposit. 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. A conventional lease contract does not distinguish between the nature of these liabilities and places all liabilities on the user of the asset, which is contradictory to Islamic Shariah. 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. Continuation of lease rentals in case of total loss or theft of vehicle If the leased vehicle is stolen or completely destroyed, the conventional leasing company continues charging the lease rent till the settlement of the Insurance claim. Under the Islamic system, rent is consideration for usage of the leased asset, and if the asset has been stolen or destroyed, the concept of rental becomes void. As such, in the above-mentioned eventualities, Meezan bank does not charge the lease rental.
Such a transaction is not straight forward as I don’t want to lease and they don’t want that either in reality! I want to buy and they want to sell! However, to guaranty their money, the camouflage it like this!
How would you feel if you had an agreement of 5 years with them, which throughout the whole period You were punctual in payments until only one month before the final payment, when a big truck came and destroyed the whole car while it was parked legally in front of your house.
It is true that the bank will not charge you for the last payment as the insurance company gave them a new car. However, your 4 years and 11 months of payment is down the drain and you have lost it all because their claim is that you were leasing!
This is unfair and consuming people’s money illegitimately.