HIRE PURCHASE-I

REDUCING TERM TAKAFUL

HANA ANIS MUNIRAH AQILAH

NABILAH

HIRE PURCHASE
An agreement to purchase goods by
installment payments over time

The buyer is leasing the asset and does

not obtain ownership until the full
amount of the contract is paid

IJARAH THUMMA AL BAY

Alternative to conventional hire purchase
(AITAB)
Al-Ijarah hire, lease or rent
Al-Bay purchase
Two contracts undertaken
separately
(i) Al-Ijarahcontract
(ii) Al-Bay'contract

HIRE PURCHASE-I REDUCING TERM

TAKAFUL

Protects the Person Covered by providing a lump

sum benefit payment in the event of death or Total
& Permanent Disability (TPD) by settling your hire
purchase financing balance with the bank.

Initially, the takaful protection is equal to the

financing amount which will be reduced in
accordance with the installment period.

WHAT BENEFITS WILL PARTICIPANT GET?

WORRY FREE

Enjoy the benefits of this investment knowing

that the hire purchase is now protected.

SETTLEMENT OF OUTSTANDING AMOUNT

FINANCED
In the event of death or permanent total
disability, your sum insured in takaful will be
used to settle your outstanding amount
financed. If there is any balance, it would be

 PERSONAL ASSETS

Your family will not have to reach into their own

savings in order to take over the hire purchase.

NO LITIGATION ISSUES

Free your loved ones from litigation issues

relating to default payment of instalments.

PROFIT FROM INVESTMENT

Upon maturity of the certificate, participant will

receive the prevailing value of Participant
Investment Fund (PIF)

Hire Purchase Act 1967

mandatory to have takaful /
insurance coverage
duration of financing
-

(must inform the renewal of policy within 4 days before

expired)

BANK MUAMALAT MALAYSIA

BERHAD
HIRE PURCHASE REDUCING TERM TAKAFUL
(HPRTT)
GREAT EASTERN TAKAFUL SDN BHD

FEATURES
Based on the contract of Al-Ijarah Thumma Al-Bai
(hire purchase)

Bank purchases the vehicle identified by the

customer from a dealer/third party

Vehicle -> new/used and of any make and models

including national or non-national brands

Margin of finance -> up to 90%

Payment period -> up to 9 years
Fixed islamic loan and flat interest rate

REQUIREMENTS
Minimum age -> 18 years old
Maximum age -> 54 years old
Who can apply -> Malaysian

Sum Covered
Minimum RM20,000
Maximum- Subject to underwriting

Full understanding in Islamic law

among the practitioners has not
been attained yet.
Not aware about the existence of
takaful in AITAB

The basic
operation of AITAB
in effect is similar
to conventional
hire-purchase
Differences :
interest &
documentation

How Islamic the

application of AITAB
itself?
Optional to the
customers in terms of
takaful product

ISSUES IN THE
IMPLEMENTATION
OF ISLAMIC HIRE
PURCHASE

CONCLUSION
New guidelines regarding Islamic Hire
Purchase

The government and banks should be

more transparent and educate the society
about Al-Ijarah Thumma Al-Bay (AITAB)