One of the most important things on everyone’s to-do list is purchasing an automobile. Not everyone has the money to get home, and crossing something off the list is a significant deal. Leasing an automobile through a bank is the best option for those who cannot afford to pay cash for one.
In Pakistan, a variety of institutions provide auto financing services. The issue is that few Pakistanis are aware of how to use it. We’ll discuss auto financing in Pakistan today and address some of the most common queries regarding this service.
Auto Financing
Leasing a car through a bank is made possible by car finance. After deciding on a vehicle, you apply for auto financing at a bank. After your application is approved, the bank purchases the vehicle on your behalf; you then take it home and repay the loan over time.
The payment process is as follows: the bank allows you to pay the remaining balance in monthly installments after receiving a predetermined proportion of the car’s purchase price as a down payment. You make the down payment right away, and until the loan is paid off, you make a specified monthly installment payment.
You don’t need to wait years to save sufficient savings to purchase a car thanks to auto finance. With a small down payment, you can purchase the car immediately and pay the remaining balance over time through a monthly installment plan.
What are the requirements to be eligible for car finance?
In order to purchase a vehicle through a Pakistani auto finance company, you must
- Be a citizen of Pakistan.
- Earn a minimum of PKR 25,000 every month.
- Be between the ages of 21 and 60 if you work for a company, and between the ages of 21 and 65 if you work for yourself or as a business owner.
- Work for at least three months or run your firm for at least six months.
What kinds of automobiles are available for bank leases?
All kinds of cars, including imported, used, and new ones, are available for leasing. For any new car, auto financing is available. There is a time limit for imported or used cars. Any imported or used car that is more than seven years old cannot be imported.
Is there a cap on auto loans?
Yes, most banks have a car loan ceiling of between PKR 2 lacs and PKR 50 lacs. This implies that the cost of a car must be at least 2 lacs and no more than 50 lacs in order to be leased through a bank such as JS Bank.
What about the deadline for auto loans? Is there one?
Yes, you have one to seven years to refund the financing funds. The installment plan that best fits your needs can be selected.
What is the down payment amount?
The down payment for a new car lease must be at least 15% of the vehicle’s purchase price. The minimum down payment for a used car will be 20%.
How about the payments each month?
As stated by the State Bank of Pakistan, a person can provide the bank no more than half of his monthly salary. Therefore, the monthly installments are determined by your income and your ability to pay the bank (which cannot exceed 50%).
Apart from the down deposit and monthly installments, are there any extra fees?
You must pay a bank processing charge of around PKR 8k–9k in addition to the down payment and monthly installments. Then there are the rates for auto insurance, which differ from one bank to another.
Is auto insurance covered by the bank’s financing plan?
Auto insurance and auto finance go hand in hand. In the financial plan, insurance is covered by all banks. Various insurance companies are represented on the panels of banks.
