This Vellfire business is made unnecessarily complicated by lack of an initial uninformed choice. Choice was of financing from Rajhi waving the Middle-Eastern corner against Maybank Islamic waving the Malaysian standards. Below are my findings:
1. Standards
Rajhi uses BBA - ie Bank purchases car and sells to customer at upside with staggered financing payments. Pure sale-purchase agreement and opts out of the hire-purchase conditions. The SPA absorbs any of the conditions within the HP Act that does not contravene the Syariah to protect the bank.
Maybank uses the typical Malaysian standard that tacks on Syariah-compliant contracts to existing transaction.
This is where philosophies differ. Whilst Rajhi's standards are stricter and more compliant given the fundamental structure of the transaction, are we to say that the contracts entered with Malaysian islamic banks are not? If so, where? Is it in the intention of the banks as a hillah? If so, who decides on this? Is this allowed on the basis of daruriyyah, which incidentally is difficult to ascertain, just as it is difficult to ascertain hillah on the part of the bank.
I would suggest that the daruriyyah is in the form of having a stronger Islamic bank presence against the conventional bank presence, and to argue one is better than the other is futile and only encourages meaningless cannibalisation of the same niche customer market. In this situation, the preference is with the Middle East standards only if other criteria are evenly matched. To use an inappropriate word in this case, I would suggest that the customer is agnostic in terms of standards as long as there is Syariah compliant acknowledgment by an established and reputable Islamic finance regulator.
2. Customer orientation and protection
The BBA allows banks to set a security deposit if required. I'm not sure of the equivalent in the AITAB but I dont recall of any such conditions. The other departure will be the purchase price with the dealer, where the Bank will pay full amount regardless of booking fee, in which case customer will have to bear ther burden of recovering the booking fee from the dealer later. To note that even in the BBA, a JPJ K3 form allowing repossession is similarly required.
These departures need to be communicated to the customer as well as the dealer upfront, as in this case, I'd need to bear the risk of non-retrieval of the booking fee, especially so when there are certain conditions that I have agreed with Jack how the final product will look like, ie pro-bono accessories of LCD, colour change, and what have yous have been agreed beforehand.
At the same time the rates are 2.48% pa, much higher than what I had asked for at 2.45%. And without ascertaining with me, the loan tenure was set at 9 years when I was actually considering 6 years. Maybank didnt flinch when I asked 2.40% and eventually agreed on 2.42%.
3. Services
This is the weakest area of the lot. After 2 weeks of haggling, I've yet to cross the finish line. With clearer expectations, I would be able to understand these changes but perhaps not at this stage. With 4 people running around and motivation flagging when Saudi dignitaries are expected to visit and all, I need to pull the trigger.
My promise though was this - I'll be back to consider them when the time comes later.
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