Faysal Islami Car Finance Review 2026

Faysal Islami Car Finance is a Diminishing Musharakah car financing product from Faysal Bank, a full Islamic bank, priced at 1-year KIBOR plus a published margin of 4.5% to 6.5% depending on which of the bank's two live pricing tables you read and whether you are salaried or self-employed. With 1-year KIBOR at 12.78% on 19 October 2026, that is an all-in rental rate between roughly 17.3% and 19.3% a year, repriced every twelve months. You put in at least 30% of the car's value, the bank finances up to 70% within the State Bank's Rs 3 million cap, and a Rs 21 lakh facility over five years costs about Rs 53,000 a month before takaful and tracker. It is a properly structured product with the most granular published pricing among Pakistani Islamic banks, offset by an early-settlement charge of 8% in the first two years and a tracker bill of more than Rs 1 lakh over five years. This review covers the contract, the pricing, a worked example, every fee, the exit terms and how Faysal compares with Meezan, UBL Ameen and the other banks in our registry.

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What Faysal Islami Car Finance is

Faysal Bank completed its conversion from a conventional bank to a full-fledged Islamic bank and describes itself as the second largest full Islamic bank in Pakistan, with 900 branches by December 2025 according to its 2025 annual report. Every product sits under a six-member Shariah Board chaired by Mufti Muhammad Mohib-ul-Haq Siddiqui, a Darul Uloom Karachi graduate who trained under Mufti Taqi Usmani and also sits on the boards of Bank Alfalah and Bank AL Habib. The bank has no conventional auto loan to steer you towards.

The contract is Diminishing Musharakah. The bank's product page states that the facility 'is based on Diminishing Musharakah': the bank and the customer jointly buy the vehicle, the bank rents out its share, and the customer buys the bank's units with each monthly payment until sole ownership passes and the bank issues a no-objection certificate to remove the hire-purchase mark. Three protections are printed as policy. Instalments start only on delivery. Loss or damage is borne by both parties in proportion to ownership unless caused by one party's negligence. And a late payment incurs a flat Rs 1,000 'as charity' that the bank says 'is not included in the income of the bank'. Our explainer on car Ijarah versus Diminishing Musharakah covers the mechanics in depth.

Pricing: the published matrix, and why there are two of them

Faysal is the only Pakistani Islamic bank that prints a full auto pricing matrix by segment and vehicle age. On 20 October 2026 we found two live versions that do not agree. The car finance page shows KIBOR plus 5% for new cars and plus 4% for used cars for salaried and self-employed professional customers, and plus 6% new and plus 5% used for business customers. The priority financing page shows KIBOR plus 4.5% new and plus 3.5% used for salaried customers, and plus 6.5% new and plus 5.5% used for self-employed professionals and business owners. Both pages say the rate is set at application and changes on each anniversary; the Key Facts Statement confirms the benchmark is 1-year KIBOR.

Segment	Car finance page (20 Oct 2026)	Priority page (20 Oct 2026)	All-in at 1Y KIBOR 12.78%
Salaried, new car	KIBOR + 5%	KIBOR + 4.5%	17.28% to 17.78%
Salaried, used car	KIBOR + 4%	KIBOR + 3.5%	16.28% to 16.78%
Self-employed professional, new car	KIBOR + 5%	KIBOR + 6.5%	17.78% to 19.28%
Self-employed business, new car	KIBOR + 6%	KIBOR + 6.5%	18.78% to 19.28%
Self-employed business, used car	KIBOR + 5%	KIBOR + 5.5%	17.78% to 18.28%

The 1-year KIBOR offer rate was 12.78% on 19 October 2026 according to the State Bank of Pakistan, with the policy rate at 11.50%. A spread of 4.5% to 6.5% is wide; our registry records UBL Ameen Drive at 1-year KIBOR plus 4.25% to 5.75%, so Faysal sits at the expensive end. Get your segment's spread written into the Key Facts Statement before you book, and treat the lower table as something to ask for rather than assume. Our guide to fixed versus KIBOR-linked Islamic car financing explains what annual repricing does to a budget.

Eligibility, limits and the SBP rules behind them

The State Bank's BPRD Circular Letter 29 of 2021 capped aggregate auto financing from all banks at Rs 3 million per person, raised the minimum down payment to 30%, limited the debt burden ratio to 40% of net income and barred imported vehicles. BPRD Circular Letter 19 of 2022 cut the maximum tenure to three years for vehicles above 1,000cc and five years for vehicles up to 1,000cc, and extended the rules to all locally assembled vehicles including electric ones. Faysal's terms mirror those rules and add income floors and age limits.

Term	Faysal Islami Car Finance (product pages, 20 Oct 2026)
Financing amount	Rs 250,000 to Rs 3,000,000, up to 70% of vehicle value
Customer equity	Minimum 30%, higher for specific makes and models
Tenure	1 to 5 years up to 1,000cc; 1 to 3 years above 1,000cc
Vehicles	Locally manufactured or assembled, new and used; used cars up to 9 years old at financing and 12 at maturity
Salaried income	Rs 30,000 a month permanent; Rs 50,000 contractual; 12 months in current job or 2 years continuous
Self-employed income	Rs 40,000 a month; at least 1 year in the current business
Other income accepted	Property rent, foreign remittance, sukuk, lien-based deposits, pension with documents
Age	21 to 65 at maturity salaried; 21 to 70 self-employed
Debt burden ratio	Not more than 40% of net income
Approval time	6 working days from a complete application

The Rs 30,000 income floor is among the lowest in the segment; our registry records MCB Islamic's MICAR at Rs 60,000 salaried. The 9-year age limit on used cars is more generous than Bank AL Habib's three-to-five-year caps; our used car financing guide covers how banks value older vehicles.

What a Rs 30 lakh car actually costs: a worked example

Faysal's Key Facts Statement gives an example: a Rs 1,000,000 facility at 12.95% over 60 months is Rs 22,727 a month, rising to Rs 23,150 if KIBOR moves up one point. That matches the standard amortisation formula, which we have used below. Take a locally assembled car priced at Rs 3,000,000. You pay Rs 900,000 as equity and the bank's share is Rs 2,100,000. For a salaried buyer at KIBOR plus 5%, the first-year rate is 17.78% and the five-year instalment is about Rs 53,075. These are estimates; the bank's schedule will differ slightly and will change on each anniversary.

Scenario (Rs 2,100,000 financed, 1Y KIBOR 12.78%)	Annual rate	Monthly instalment	Total paid	Cost above principal
Salaried, KIBOR + 4.5%, 60 months	17.28%	About Rs 52,500	About Rs 31.5 lakh	About Rs 10.5 lakh
Salaried, KIBOR + 5%, 60 months	17.78%	About Rs 53,075	About Rs 31.8 lakh	About Rs 10.8 lakh
Self-employed business, KIBOR + 6%, 60 months	18.78%	About Rs 54,220	About Rs 32.5 lakh	About Rs 11.5 lakh
Self-employed business, KIBOR + 6.5%, 60 months	19.28%	About Rs 54,800	About Rs 32.9 lakh	About Rs 11.9 lakh
Salaried, KIBOR + 5%, 36 months (car above 1,000cc)	17.78%	About Rs 75,690	About Rs 27.2 lakh	About Rs 6.2 lakh
Salaried, KIBOR + 5%, 60 months, KIBOR up 1 point	18.78%	About Rs 54,220	Up about Rs 1,150 a month	Adds about Rs 69,000

The 36-month row is the one buyers underestimate. Anything above 1,000cc, which includes most sedans and every SUV, must be repaid in three years, and the instalment on the same Rs 21 lakh jumps from about Rs 53,000 to about Rs 75,700. The 40% debt burden rule then requires net monthly income of roughly Rs 1.9 lakh for the 36-month case and Rs 1.33 lakh for the 60-month case. The KIBOR row shows why Meezan's fixed rate has a following. Our car financing budget maths guide repeats the arithmetic for a Rs 50 lakh car.

Every fee beyond the rental

Faysal's Islamic Schedule of Charges for January to June 2026, signed off by the Shariah board, lists the car finance charges, and the schedule of charges index page now also carries a July to December 2026 edition. The processing fee is the first inconsistency: the product page FAQ says Rs 12,000 once the case is approved, while the schedule and the 2025 Key Facts Statement both say Rs 13,000 per vehicle, exclusive of 16% federal excise duty. Amal women's account holders get 50% off. Roshan Apni Car, the variant for Roshan Digital Account holders, carries no processing charge.

Processing fee: Rs 12,000 (product page) or Rs 13,000 (schedule of charges and KFS), plus 16% FED, payable only on approval. Roshan Apni Car: nil.
Upfront tracker fee: Rs 22,000 plus FED or provincial sales tax, paid with the equity.
Monthly tracker management fee: Rs 1,800, which is Rs 108,000 over 60 months and Rs 64,800 over 36.
Takaful: comprehensive cover from one of ten panel operators (Adamjee, EFU, IGI, TPL, UBL, Atlas, Premier, Salaam, Jubilee and Pak-Qatar); first year paid upfront, no rate published.
Late payment: Rs 1,000 per instalment, paid as charity and excluded from bank income.
Re-issuance of purchase order Rs 1,200; re-issuance of NOC Rs 1,500; tracker replacement Rs 2,000.
Repossession: agency charges up to Rs 80,000, plus parking at Rs 3,500 and transport, appraisal and warehouse costs at actual.
Registration, levies and taxes: at actual, paid with the upfront amount.

The tracker is the cost most buyers miss: Rs 22,000 upfront plus Rs 1,800 a month is Rs 130,000 over five years, about two and a half monthly instalments in our example. Faysal does not publish its takaful rate; our registry records HBL Islamic at 1.75% of vehicle price, BankIslami at 1.49% and Meezan from 1.99%, so budget in that band for year one. Our motor takaful guide explains what the panel operators cover.

Early settlement: the 8% that defines the product

Faysal lets you settle in full or prepay in part after six months from disbursement, at a price. The 2025 Key Facts Statement and the January to June 2026 schedule both set the charge at 8% of the outstanding amount in the first and second year and 7% from the third year onward, with the same percentages on partial payments. On a Rs 15 lakh balance after eighteen months, that is Rs 1.2 lakh to exit. Under the residual value module the balloon is included in the settlement figure. Roshan Apni Car customers pay nothing to settle or prepay after the first year. Among the banks in our registry this is one of the stiffest published exit schedules; Bank AL Habib's Islamic Apni Car page, for instance, advertises no prepayment penalty and two free partial payments a year of at least Rs 50,000.

Bank and product	Published early settlement or prepayment terms
Faysal Islami Car Finance	8% of outstanding in years 1 and 2, 7% thereafter; partial payments charged the same; Roshan Apni Car nil after year 1
Bank AL Habib Islamic Apni Car	No prepayment penalty; two free partial payments a year of at least Rs 50,000
Dubai Islamic Bank Auto Finance	Grid declining from 20% at 6 months to 0% at 60 months (registry, August 2026)
BankIslami Islami Auto Finance	5% to 8% premium on outstanding units plus unrecovered takaful and tracker (registry, August 2026)
Bank Alfalah Islamic Auto Finance	6% of outstanding asset value less security deposit (registry, August 2026)
UBL Ameen Drive	Early unit purchase priced at plus 1% per the published matrix (registry, August 2026)

If you expect a bonus or a plot sale within two years and intend to clear the car, Bank AL Habib or DIB will save real money; our five-bank comparison ranks the exit terms side by side. If you plan to run the full term, the 8% matters less than the spread.

Rent-only plans and the residual value grid

Two options reshape the instalment inside the same contract. The one-year and two-year rent-only plans let you pay only the rental portion at first 'so that the customer is not overburdened'; unit purchases are then compressed into the remaining years, so later instalments are higher. The residual value module applies to selected new vehicles from Suzuki, Indus (Toyota), Honda, KIA and Master and lets you defer a lump sum to maturity: at most 50% of vehicle value on a one-year tenure, 40% on two, 35% on three, 30% on four and 25% on five. On our five-year example, deferring a Rs 750,000 residual cuts the instalment from about Rs 53,075 to about Rs 45,230, in exchange for a Rs 7.5 lakh payment at the end and more total rental because the bank's share stays larger for longer. It is sensible if you will sell or refinance at maturity and a trap if the balloon arrives when KIBOR and car prices have both moved against you. Our note on residual value in car Ijarah covers what happens if the car is worth less than the balloon.

Is Faysal Islami Car Finance halal?

On the published terms, yes. The conditions scholars attach to Diminishing Musharakah are that the bank genuinely co-owns the asset, charges rent only while the customer has use of it, shares loss in proportion to ownership and does not treat late-payment charges as income. Faysal prints all four on its product page, and its Shariah board certifies the schedule of charges each half-year. The remaining objection is the benchmark: the rental resets annually to 1-year KIBOR, an interbank interest rate. The mainstream position among Pakistani scholars, including Mufti Taqi Usmani, is that using an interest rate as a pricing benchmark does not by itself make a lease riba, because what is paid for is the use of a jointly owned asset rather than the time value of money, although a separate Islamic benchmark would be preferable. Our analysis of whether KIBOR-based Islamic financing is halal sets out both views.

Faysal versus the other Islamic car finance products

The comparison uses our registry entries, verified against each bank's website in August 2026, and Faysal's pages as of 20 October 2026. Meezan's and HBL's figures are rate snapshots the banks may revise.

Product	Structure	Published pricing	Minimum equity	Financing cap
Faysal Islami Car Finance	Diminishing Musharakah	1Y KIBOR + 4.5% to 6.5% by segment and vehicle age	30%	Rs 3 million, 70% of value
Meezan Car Ijarah	Ijarah (operating lease)	Fixed 12.98% (1 year) to 13.29% (7 years) or 11.74% variable, August 2026 snapshot	15% salaried, 25% self-employed, 30% used	Rs 10 million net across two vehicles
UBL Ameen Drive	Diminishing Musharakah	1Y KIBOR + 4.25% to 5.25% existing customers, + 4.75% to 5.75% new	30%	Rs 200,000 to Rs 3 million
HBL Islamic Car Finance	Diminishing Musharakah	14.5% embedded in the calculator, no dated rate card	30% to 50%	SBP cap; income floor Rs 35,000
BankIslami Islami Auto Finance	Diminishing Musharakah	Not published; revised every 6 months	30% to 90%	Rs 500,000 to Rs 3 million
Bank Alfalah Islamic Auto Finance	Pure Ijarah, bank owns and insures	1Y KIBOR + margin left blank in the public KFS	30% security deposit	SBP cap
Dubai Islamic Bank Auto Finance	Musharaka cum Ijarah	Fixed or 6/12-month KIBOR; spread not published	30%	Rs 150,000 to Rs 3 million
Bank AL Habib Islamic Apni Car	Diminishing Musharakah	Not published	15% new up to 1,000cc, 20% used, 30% above 1,000cc	Rs 3 million

Meezan is the outlier: its product is an Ijarah lease rather than a Diminishing Musharakah, its page quotes net financing up to Rs 10 million, a 15% deposit for salaried buyers and fixed rentals, all covered in our Meezan Car Ijarah guide. Against the Diminishing Musharakah peers, Faysal's edge is that you can compute your instalment from the website; UBL Ameen is the only other bank with a published KIBOR matrix, and its spreads are a little lower. For the two banks as institutions, see Meezan Bank versus Faysal Bank.

Our view

Faysal Islami Car Finance is the product to choose if you want to know your instalment before you walk into a branch, you intend to run the facility to maturity, and you are buying a car at or below 1,000cc so the five-year tenure applies. The structure is correct and candidly documented, the income floor is low, and the published matrix is a genuine service in a market where most Islamic banks hide pricing behind 'competitive rates'. The cost is a spread at the upper end of published Islamic pricing, a tracker bill of about Rs 1.3 lakh over five years, and an 8% exit charge in the first two years. Until the bank reconciles its two pricing tables and two processing fees, insist on a Key Facts Statement with your segment's spread written in. If you expect to prepay, Bank AL Habib or DIB will cost less. If you want payment certainty, Meezan's fixed rate is the only real option. Roshan Digital Account holders should ask for Roshan Apni Car by name. Facts checked against faysalbank.com and sbp.org.pk on 20 October 2026.

Frequently asked questions

What is the Faysal Bank car finance rate in 2026?

Faysal prices car finance at 1-year KIBOR plus a margin. On 20 October 2026 its car finance page showed KIBOR plus 5% for new cars and plus 4% for used cars for salaried and professional customers, and plus 6% and 5% for business owners; its priority page showed plus 4.5% and 6.5% for new cars. With 1-year KIBOR at 12.78%, the all-in rate is about 17.3% to 19.3%, repriced every twelve months.

Is Faysal Bank car finance Islamic?

Yes. Faysal Bank is a full-fledged Islamic bank and its car finance uses Diminishing Musharakah: the bank and customer jointly own the car, the bank rents out its share, and the customer buys the bank's units each month until it owns the vehicle outright. Rentals start at delivery, loss is shared by ownership ratio, and late fees of Rs 1,000 go to charity. A Shariah board chaired by Mufti Mohib-ul-Haq Siddiqui oversees it.

How much down payment does Faysal Islami Car Finance require?

A minimum of 30% of the vehicle's value as equity, or more for specific makes and models, matching the State Bank's 2021 rule. The bank finances up to 70% of the value, between Rs 250,000 and Rs 3,000,000. On top of the equity you pay the processing fee, the first year's takaful, the Rs 22,000 tracker fee and registration costs before delivery.

What is the maximum tenure for Faysal car finance?

Five years for vehicles up to 1,000cc and three years for vehicles above 1,000cc. The limits come from the State Bank's BPRD Circular Letter 19 of 2022 and apply to every bank. On a Rs 21 lakh facility at 17.78%, the three-year instalment is about Rs 75,700 a month against about Rs 53,000 over five years, so engine size has a large effect on affordability.

Can I pay off Faysal car finance early?

Yes, after six months from disbursement, but the schedule of charges levies 8% of the outstanding amount in the first and second year and 7% thereafter, on both full settlement and partial prepayment. Under the residual value module the balloon is included in the settlement figure. Roshan Apni Car customers pay no early settlement or partial payment charge after the first year.