It goes without saying that the global pandemic has affected all industries and individuals alike either directly or indirectly. In trying to navigate the difficult situation, you may have had to let go of some norms, items or assets and property in general. In other cases, you may have had to or may already be considering replacing what you have with something similar but cheaper.
A good example is with cars. Buying or replacing the one you already own with a brand new one may not be that practical at the moment. A second hand one is the better option for now. Unfortunately it might still not be that easy to obtain because of the obvious financial pressure, but there’s hope. This is thanks to a strategic move by Gulf African Bank, the Shariah Banking leader in the country, which is set to ease the financial burden for those looking to buy their next car.
The premier Shariah compliant bank recently got into a partnership with Toyotsu Auto Mart Kenya, a leader in car dealership of quality pre-owned vehicles in the country. The partnership, which was finalized on 16th March 2021, will go a long way in enabling customers to access Shariah financing for the acquisition of vehicles. Gulf Africa Bank will be providing more people with more customized financing deals to ease their logistic challenges.
“Customers taking advantage of this partnership will have an opportunity to enjoy a lifetime car care experience for all their Japanese models, with free pre-delivery services in addition to all benefits specific to this agreement. All vehicles sold by Toyotsu are inspected by our specially trained inspectors and the inspection report is disclosed. Our customers are assured of the best quality, accident free and genuine mileage vehicles and a transparent process,” said Yoichi Hashimoto, Toyotsu Auto Mart Kenya Managing Director.
Packages under the Gulf-Toyatsu partnership
Should you choose to take advantage of this partnership, you will be able to enjoy any of the three available packages, each with its own value additions. The packages include:
- The standard package
- Deluxe package
- Premium package
The standard package
For the standard package, you will enjoy, among many different benefits:
- A 60-day warranty
- Ksh 20,000 free fuel
- A trade in option
- A discounted maintenance service plan
- Free AA membership while having all costs of insurance and installation of tracking devices covered
- A credit card facility of Ksh 20,000 with an option to enhance the limit.
- The Bank will finance 90% of the value of the vehicle and the customer 10% with a 6-year repayment term.
Deluxe package
- For the deluxe package, subscribers will enjoy the following in addition to all benefits enjoyed by the standard package:
- A 1-year warranty
- Ksh 50,000 free fuel
Premium package
Premium package subscribers will enjoy:
- Free fuel worth Ksh 100,000 in addition to all standard and deluxe package benefits
All interested customers who meet the requirements will enjoy a turnaround time (TAT) of 48 hours.
General information on Shariah car financing
This partnership will undoubtedly make things easier for those looking to buy vehicles for private use. However, you should note that generally, Shariah Banking differs from conventional banking in a number of ways and areas. This is also the case when it comes to how Shariah banks finance the purchasing of cars.
Requirements for Shariah compliant financing when it comes to auto financing
Some of the requirements for Shariah financing on vehicles purchase include:
- The financing institution has to be involved in the sale and purchasing process
- The Shariah bank will not benefit from any of the penalties you will have to pay as a result of late payments. Typically, Shariah banking laws indicate that these charges should be donated to charity but things differ across the different banks with regards to where the money goes
Models of Shariah-compliant car financing
There are generally four different models of Shariah-compliant financing when it comes to vehicle purchasing, used by different banks. They are:
- Ijarah – based car financing- Here, the bank purchases the car and owns it, but abides by the customer’s specifications. The bank will then hand over the car to the customer on lease and will then charge rent for the use of the car. When the lease period lapses, car ownership is fully transferred to the customer.
- Murabahah-based car financing- for this model, the bank purchases the car and owns it, then sells it to the customer by adding a fixed and known profit, on the basis of deferred payments. The selling price in this case is divided into equal monthly installments.
- Diminishing Musharakah-based car financing- Here, the bank and customer both contribute to the purchase of the car and create co-ownership. It is registered under joint ownership between the Bank and the customer. The customer in this case makes two payments, buys Bank’s shares on the asset and pays rent for the using Bank’s remaining shares. This rent is proportionate to the bank’s share in the car. The payment continues until the customer purchases all of the Bank’s shares and ownership of the car is fully transferred to him.
Meanwhile, if you’re interested in getting Shariah financing on the purchase of your next car, SMS ‘TOYOTSU’ to 21981 call 0711075000 or visit any Gulf African Bank branch countrywide. Alternatively, you can visit Toyotsu Auto Mark showrooms along Uhuru Highway or Toyotsu Headquaters at Toyota Business Park in South C, Nairobi. Don’t miss out on this great auto financing offer!
