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With so many auto loan schemes available today, customers are spoilt for choice. Lord, won't you buy me a Mercedes-Benz, My friends all drive Porsches, I must make amends, sang Janis Joplin in the swinging sixties. And she was so right! However modern and stylish one's own car may be , it is a fact of life that one will always covet another man's/woman's car ... or a newer or better model.
Since their invention in the late 1800s, cars have played a major role in the lives of people, and owning one or more has never been easier. Not only do buyers have an exhaustive choice of makes and models from different countries to choose from, they also have an abundance of loan schemes to help them zero in on the car they wish to own. Banks and other finance providers are only too glad to help clients get their dream-car with minimum inconvenience. Definition An auto loan can be defined as a sum of money lent to a person to buy the car of his/her choice, on condition he/she pays it to the lender, usually a bank or finance institution, at a rate of interest within a certain period. In recent years, Islamic banking and finance products have gained popularity in this part of the world. Murabaha is an Islamic finance scheme that has been approved by Islamic scholars. It is a method of purchasing and selling, rather than lending, wherein the bank buys the preferred new or used car from the dealer or seller, and sells it to the buyer with a pre-determined agreed profit, and on an installment basis. The financing is according to Shariah law, based on buying/selling, and follows a pre-determined profit rate. Quite a few banks and financial institutions either offer only Islamic schemes, or have added them to their existing range of loan schemes. Last year Amlak Finance, pioneer and leader in home finance and mortgage in the UAE, added Murabaha Islamic Shariah-compliant auto finance scheme to its portfolio. The scheme has gained popularity and found many takers. Currently Amlak provides this scheme in conjunction with several major auto dealers in the country, but may soon offer it exclusively through one particular leading dealer. Car finance is available for a period of up to five years for new cars and four years for used ones. The profit rates vary from 3.99 per cent to 4.45 per cent for new vehicles, and 4.5 per cent to 4.95 per cent for used vehicles, depending on the initial down-payment. The Murabaha scheme is also available for commercial vehicles. Competitive rates Dubai Islamic Bank offers Murabaha auto finance schemes that have competitive profit rates and flexible payment options. National Bank of Abu Dhabi's Islamic finance scheme, Sayyarati Car Loan, is offered to both new and used cars. It also provides competitive profit rates, while also adding insurance finance to its package. HSBC, through its subsidiary, HSBC Middle East Finance Company Limited (HSBC MEFCO), also offers Shariah-compliant Murabaha auto finance, along with its traditional hire purchase mortgage scheme. Clients can choose the scheme they want when buying a new or used car. They get benefits such as zero downpayment option, free set-up of HSBC Prosper Account with minimum balance waiver, free road assistance, deferred payment Murabaha options and the ability to pay monthly Murabaha installments through standing instructions. Wide choice Those who do not want to go for Islamic finance schemes have a wealth of choices too. HSBC MEFCO has been providing vehicle finance to customers for over three decades. With its local insight and global expertise, it is well-placed to offer tailor-made loan packages for various segments of the market. It follows hire purchase, which is the traditional method of financing a vehicle. The borrower or customer has ownership of the vehicle, but a mortgage over the vehicle is taken out in favour of HSBC MEFCO. The monthly installment amount is determined by the sale price of the vehicle, the amount of initial deposit, or downpayment paid, period of the contract, and the agreed interest rate. On repayment of advance, and on the request of the customer, the mortgage over the vehicle is released or transferred. No salary transfer is required for taking this loan scheme, which is available for new and used cars. Free Road Assistance programme, free setup of Prosper Account with minimum balance waiver, nil down-payment option, no hidden charges, preferential terms for HSBC customers, and ‘Golden Key Certificate' that can be used to finance any car of the borrower's choice, up to the pre-approved limit, are some of the advantages in the HSBC MEFCO loan. A host of fabulous features, benefits and advantages make meDRIVE car loan available at all branches of Emirates Bank International and meBANK, a really easy way to own their coveted car. Customers can also apply for a meDRIVE loan via the internet. Zero downpayment option is available for both new and used cars, and the repayment period can be extended up to 60 months. The borrower also has the option of taking a loan amount up to Dh250 ,000 and deferring the first installment up to 60 days. While all takers of car loans get attractive interest rates and need not transfer salary to this bank, those who do transfer salary get more attractive rates of interest. Free meACCOUNTS and associated benefits with no minimum balance required, choice of a credit card with membership fee waived for the first year, and convenient account inquiries and transactions through the meBANK website are some of the other benefits a meDRIVE customer gets. The exclusive ladies' product and service from meBANK, meLADY, includes car loans with all regular benefits and the added advantage of getting the loan delivered to the lady customer at her doorstep. Standard Chartered Auto Loans are designed with speed in mind and quick approvals, affordable rates, and simple application procedures are its hallmarks. Applying for loans can be done easily and quickly at leading auto-dealerships in town as well as through the bank's branches, or from home with the help of a visiting consultant. Minimum formalities Whether it is new or used cars up to six years old you are looking out for, or saloon cars or four-wheel drive vehicles for business or personal use, Standard Chartered Auto Loans provide finance quickly and with minimum formalities. Initial downpayments required are low, and loan tenures can be up to 48 months, with financing offered for rustproofing too. The loans come with an exclusive insurance package from leading insurance provider AXA Insurance. If customers have a regular payment record on previous facilities, they could enjoy privileges such as preferential interest rates, priority processing, zero downpayments and much more. Quick approvals and minimum documentation are characteristic of Dubai Bank car loans. Competitive interest rates, combined with a host of advantages, including insurance, extended warranty of the car, zero downpayment, no charges, and easy repayment terms extending up to 48 months, make car loans from Dubai Bank highly attractive to customers. Abu Dhabi Commercial Bank Passenger Car loans are available to UAE nationals and expatriate account holders. Up to 85 per cent of the purchase price is offered as loan at a flat interest rate of 4.75 per cent per annum if the borrower meets the conditions. Repayment period may go up to 60 months, based on country of origin, make of the car, model year and special schemes. At present, the bank also provides loans to non-account holders and for used cars. Interest on loans and other terms are market competitive and flexible. Repaym
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