5 Benefits of Sharia Used Car Financing You Should Consider

Sharia financing has become a popular choice among the public, including in Indonesia, as the demand for vehicles continues to grow. One of the most sought-after financing options is Sharia used car financing. Here is a complete explanation from the BFI Finance Team about the system and benefits of Sharia car financing that you need to know.

1. What is Sharia Used Car Financing?

Sharia used car financing is a financial product provided by Islamic financial institutions to help customers purchase used cars based on Sharia principles. In this system, the financial institution acts as a financier using specific contracts, such as Murabahah (cost-plus financing).

2. Benefits of Sharia Used Car Financing

Sharia used car financing offers several advantages that make it appealing, especially for those who want to conduct transactions following Islamic law.

2.1 Fixed Installments

The first benefit of Sharia used car financing is its fixed installments. In Sharia financing, the installment amount remains the same throughout the financing period. There are no fluctuations due to interest rate changes, allowing customers to plan their finances more effectively and with peace of mind.

2.2 Interest-Free

Unlike conventional used car loans, Sharia used car financing does not charge interest. Instead, the financial institution earns profit through an agreed-upon margin.

2.3 No Late Payment Penalties

If a debtor delays payment, they will not be subject to interest-based late fees. However, they may be required to pay Ta’widh, which is compensation for the inconvenience caused by the delay.

2.4 Guaranteed Halal Funding Sources

Another benefit of Sharia used car financing is that the funding source is guaranteed to be halal. The funds used come from halal investments or savings that have been verified, ensuring security and peace of mind for customers.

2.5 Fair and Transparent

The Sharia financing process is carried out with full transparency. All fees and profit margins are clearly stated upfront, eliminating hidden charges that could burden the customer.

3. Pillars and Conditions of Sharia Used Car Financing

To ensure that the used car financing process complies with Sharia law, certain pillars and conditions must be met:

3.1 Contracting Parties

There are three main contracting parties:

• The Islamic financial institution (financier)
• The customer (recipient of financing)
• The showroom, supplier, or initial owner of the vehicle

Both parties must fulfill valid conditions, such as being of legal age, mentally sound, and not under duress.

3.2 Car as the Contracted Object

The financed car must meet the following criteria:

• Clearly specified details (brand, type, and condition)
• Owned by an authorized party (financial institution or third party)

3.3 Type of Contract (Akad)

The contract must be clear and agreed upon by both parties. Common types of contracts in Sharia car financing include:

• Murabahah: A cost-plus sale where the profit margin is agreed upon
• Ijarah: Lease financing with an ownership option at the end of the term
• Musyarakah: A partnership between the customer and the financial institution to purchase a car

The contract used in BFI Finance’s Sharia used car financing is Murabahah, or a cost-plus sale agreement with a fixed margin. Here’s how it works:

1. BFI Finance purchases the used car that the customer wants from a used car showroom.
2. The car is then sold to the customer at a price that includes the agreed profit margin.
3. The customer pays the installments according to the agreement, without additional interest.

4. Sharia Used Car Financing Scheme

The calculation scheme for Sharia used car financing differs from conventional car loans. Here’s a simple illustration:

By understanding the system, pillars, and calculation scheme of Sharia car financing, you can make a wiser decision that aligns with your needs and values. If you're planning to buy a car, Sharia car financing is an option worth considering. Hopefully, this article helps you better understand its benefits and simplifies your decision-making process. Aamiin.

BFI Finance now offers a variety of financing products, including Sharia used car financing. Enjoy installments without penalties, without additional fees, and without administration or insurance charges. Our team ensures a smooth and transparent financing process from start to finish.

 #JauhLebihTenang apply for your Sharia used car financing now at BFI Finance!