There are different measures taken by the Auto Development Policy makers to make sure that the suppliers are dealing with the trustworthy models. It has helped a buyer to access a car that confirms to all the needs and wallet of the buyer. To alleviate the confusion of user, we have thematically divided the factors that play their role in influencing the buying decision of a person.

Since for many in the middle class of Pakistan, buying a car is the first big purchase thus they need to have extra attentive and concerned about the machine they are going to pay for. Although, once you have made your mind to buy a car for you, you will be seeing latest offered and a number of options around you. As a base tip, we would like to say that never get swayed by the colorful attractive brochures or the gleaming automobiles that you can see in the advertisement. To play safe, you need to consider the following steps in mind if you need to make a right buying decision.

Determine Your Needs:

First of all, ask yourself the reason for buying a car. Are you looking for a vehicle of your own to drive you down into the town? Are you looking for a mean for daily commute? Or are you looking for a vehicle that can help you to have a comfortable drive on the highway? Do you need to make a trip to another city, every weekend or less often? How many people will you have a drive on the regular basis?

Remember your lifestyle has a major role to play in the selection of the car. It helps you to understand what car you need to have in terms of size, capacity or mileage? Answering these questions clearly will help you limit your car search field and will help you make a decision quicker and smarter.

Generate Information as Much as Possible:

Once you have shortlisted the cars that suit your needs and lifestyle, it’s time to do some serious research. You need to generate information about the shortlisted make and models of the cars you are thinking to choose from.

Researching is made easy with the advanced internet services. They can generate you information in bulks.  Review the handling comfort and other classifications of the cars you are focused on. Compare the results and filter your shortlisted cars to find the most suitable option to consider. To make sure that you have to access authentic information, visit the official website of the manufacturing company. Official company websites provide the most accurate information about the specifications and abilities of a car. They will also give you the actual price of the car.

Reviews are another important part of the research; you need to check what existing users had said about the car. For reviews you can also visit third party websites that are dealing with the supply of cars, users do leave a comment about their experience on such websites.

Your Financial State:

Money is the most important factor when it comes to buying anything, big or small. As cars and homes demand some major investment, the money factor becomes the backbone of the entire scenario.

Before taking the driving wheel of your very first vehicle, you need to make sure that you have sufficient amount of money to make the purchase. If you do not have enough money to pay in cash, you may need help from the bank. Banks may help you figure out your borrowing capacity according to different payment modules. They may offer you a three to seven years plan to pay for the car. However, this facility is served along with a specific and pre-defined interest rate. Once you have sorted out the payment procedures and amount, you will be able to narrow your search and focus on the make and model that is in your budget.

The Periodic Charges:

Have you considered the recurring charges that you will have to deal with, being a car owner? Yes! We are talking about the maintenance, petrol and parking charges etc. Counting all these charges in your monthly budget, along with the installments for the bank will make the car quite expensive for you. So you need to make sure that you are able to afford these periodic payments before you proceed to buy a car.

The Insurance Quote:

Now, this is something that offers you a broad field to play in. There are banks that offer insurance service when you ask them for a car loan or proceed to have a car on installments, and then there are companies that are specifically dealing with insurance services. These companies are then divided into different categories of insurance. Auto insurance is something that will work for you when you are signing an agreement to own a car.

Car insurance is highly suggested by experts to keep yourself, your family and your car safe. Before buying a car, get an overview of the insurance premium and what plan you are willing to go with. As different insurance companies offer different auto insurance plans. You can check all the basic details about Auto Insurance by clicking here.

A Vendor You Can Trust:

You will need a dealer to buy a car. This rule implies to both used and new car sale and purchase. If you are looking for a used car, you need to get it inspected by an expert to make sure that the car has genuine parts and the condition of the vehicle is eligible to be purchased. You can ask a trusted friend or family member whom you think have had enough experience in dealing with car assessment. If you think that a seller is pressurizing you, the doors are open and you must move to another seller. You must keep in mind that there is no time to rethink, once you have booked the car, signed the agreement, there is no way back.

Look for Bargain:

If you have fallen for any specific car, you must visit the official website of the manufacturers. To check if there is any promotion available. The automobile companies keep offering a discount on different occasions. So you can wait a bit for the upcoming offer or can go for the recent one if any.

Try Before Buy:

Select and shortlist models and try them on the roads that you will usually be driving on. You can compare the performance and check if they are fun to drive or not. If you are keen to buy a car of specific model rent the same model and drive for about 1000 km. This trial must take 3 to 4 days before to you jump on the final decision.  Check how comfortable you feel driving it. This practice will give you a clear idea of how you will feel while driving a car of your choice. Check if the seats are comfortable and if the trunk is big enough to fit in your average luggage. It will also give you an idea about the consumption of fuel and will help you establish a clear idea about other ongoing costs.

Safe Some Extra Money:

If you have managed all these things wisely, you will surely be in your budget. And if it is really so, you can have the freedom to think about changing the color of the car. Or you can refurbish the interior of the car. You may think about adding a gadget to the dashboard or upgrade the music system. Certainly, for all such tasks, you will have to pay extra amount but you will have a highly personalized car that you will enjoy having for a long run.

Reading Terms of Agreement:

Before you sign the agreement, make sure that you have gone through all the stated terms and conditions. It may include delivery charges or any other additional cost. Being a buyer you have the right to get expert help by letting them review the contract and ask for a legal opinion. Keep in mind that there is nothing bad in getting a car of your choice but, getting stuck in?? something is never a good idea. Being careful is better than being in a problem.

New Car Vs. Old Car

There is a difference in buying a new car versus buying an old car. And here are the points that you must keep in mind while looking cars in any of these categories.

What Do You Need to Consider While Buying a New Car?

No one wants to regrets, especially while making a major purchase as that of a car or property. With a perfect plan of action, you can save yourself and avoid feeling guilty of signing an agreement that won’t work for you. Here are few points that you must keep in mind while buying a new car;

• Check for the possible options in a market
• Look for the most demanded item and what customers or users have to say about it
• Never compromise on your budget and try to find an option that suits your budget
• Research for the product as well as the company and check if any platform is offering a discount on it
• Consider the resale value as it is one of the most important things to keep in mind while buying any such thing. The resale value of the car depends on the condition make and model of the car and how well it is working in the market and on the roads
• Spare parts are other important elements that you must keep in mind while buying a new car. Make sure that the spare parts of the car are easily available in the market
• While buying for a vendor check for what after sale services are offered by the seller

What Do You Need to Consider While Buying a Used Car?

It is not necessary that you must buy a new car. You may get many options in used cars that are economical and can be a good return on investment. You may not know how the car had been used by the previous driver thus you will have to pay extra attention before paying for the car. Here are some quick tips that you need to keep in mind while buying a used car;

• Decide the type, make and model of the car you will prefer to find
• Start searching for the specific car type in the showrooms that offer use cars of that model
• Do not go for the new model cars, they may cost you more and if you opt to buy a used car of the latest model, suggested would be to buy it brand new.
• What are the arrangements of the parking area of the car?   Do you have enough space that is secure and you can place your car overnight?
• Check for the maintenance records to have the idea what changes have been done in the car, over the time. It will also include the assessment of the spare parts of a car.
• You will need to check many other things before buying it. You can check for the condition of body parts, gear knobs, foot pedals, switches and steering stalks, roof liner, windows and door panels etc.
• Checking for the noise in the engine is also a must before paying for it.

Documents that You Will Need While Buying a Car in Pakistan:

Up till now, the only thing that matters is money. Once you are done with the car selection, you need to pay attention to the documentation process. Without proper documentation and signed agreement, you cannot proceed with owning a car if you have not done proper documentation. It is a sensitive matter and you must handle it with care.

• The On-Road Costs: It is the overall charges that you need to pay to own the car legally. It is the combination of a registration fee and the insurance of a car in general. The registration includes; motor vehicle tax, withholding tax, multifarious and motor vehicle registration etc.
• Excise and Taxation: If you think you can skip it, you are wrong. They are the first one to be paid on the list. You can get all the information about the fee and processing from the website.
•  List of Main Documents for Application: You need to have a photocopy of your CNIC or person on whose name the car will be purchased and application to the excise and taxation officer for registration of the new vehicle.
• Document verification: For different cases, you need to have different documents for verification which include; sales certificate, sales invoice, auction Boucher if any and interrelated documents and bills.
• Residential Proofs: There are some basic documents that you will need to provide which includes; CNOC, utility bills, lease agreement, appointment letter and registry.

Although it may sound simple, buying a car demands a high level of experience and knowledge in each process. If you are buying a car for the first time in Pakistan, you need to make sure that you have completed all the necessary documentation and procedure and you are the legal owner of the car.

Khurram Zahid

The post How to Buy Your First Car in Pakistan Even If You Have Little Knowledge About Cars appeared first on Smartchoice.pk.

With no doubts, Zakat is one of the most important pillars of Islam and is mandatory for every Muslim who is financially stable, to pay Zakat. It is an act of worship and is obligatory that every eligible Muslim pays it once a year. The essence of the act is to help the underprivileged people of the Muslim community.

The Holy Quran has discussed Zakat, a number of times. According to Quran; “And be steadfast in prayer and regular in charity: And whatever good ye send forth for your souls before you, ye shall find it with Allah” (Qur’an 2:110).

As per the teaching of Islam, Zakat is paid to purify the wealth and to help the poor people in Muslim society. For this reason, the Muslims who own enough wealth is required to give a little amount from their wealth to the needy around them. Islam has set it as a duty of the wealthy people to serve the deprived Muslim community by helping them in every single possible way and by not letting them down in any case.

When Should We Pay Zakat?

According to the directions of Islam, a Muslim must pay Zakat if he or she has a surplus of the wealth in their possession. Once you own a specified excess amount of wealth in your possession for more than one year, you are bound to pay Zakat on it.

This wealth possession includes the following;

• Silver, gold or any other precious jewelry ornaments
• Money that is lent to others
• Stocks or shares
• Pension
• Cash saved in banks, a house where you are not living
• Any kind of property that is kept with the aim of investment or earning profit

How to Calculate Nisab?

To pay off your Zakat you need to find the exact amount of cash you are bound to pay on the specific amount of property or wealth you own. This specific amount of Zakat to be paid varies from one person to another and is called as Nisab in Islam.

Calculating the Nisab: Nisab is a cut-off amount. Whatever you own, if more than Nisab, you are supposed to pay Zakat on it. If your personal wealth is below the level of Nisab, you are not eligible to pay Zakat. Nisab can be calculated according to the current market price of gold or silver. Choose rates of either gold or silver and calculate according to that. The Nisab is the cash amount equal to the 3 ounce/87.48 grams of gold or 21 ounces/ 612.36 grams of pure silver. There are different online Zakat calculators that can help you calculate your Zakat and pay the exact amount of Zakat you own.

However, State Bank of Pakistan has set Nisab of PKR. 38,406 for the current year Zakat deduction from saving bank accounts, profit and loss sharing and similar bank accounts having a credit balance equals to announced Nisab.

Determining the Net Worth of Zakat:

Minus the liabilities form the Zakat eligible assets you own. For instance, your total assets for the year are PKR 60,000 and your net liabilities are PKR 20,000, the Zakat net worth will be PKR 40,000 (60,000-20,000=40,000). Calculate your own assets in this way and find how much do you need to pay for Zakat this year.

Calculating the Zakat:

You need to compare the Nisab (which is as per Government announcement is PKR. 38,406 for current year) with the net pool of Zakat and if the net worth of Zakat is more than the Nisab, you owe an amount of Zakat to be paid. If it is less, you do not owe any Zakat.

For instance, if the net worth of Zakat is PKR 40,000, and as per Nisab, you are eligible to pay 2.5% of Zakatable amount which makes PKR 1,000, but giving more than that is preferred, if you are financially stable to do so.

Once you are done with the calculation of Zakat, better is to gives it to reputed charities and organization that are directly linked to the people who are in need of financial aid. However, in Pakistan better suggested is to look around you and you may find many needy people who deserve Zakat and stand under the 8 categories of Zakat eligibility. If you know any such person personally, pay Zakat to them.

Calculating Zakat on Profit:

Calculating Zakat on assets is different than the calculation of Zakat on the business profit or loss. When we speak about business, the profit or loss is irrelevant to the Zakat calculations. The Zakat for business is calculated on the basis of the current Zakatable assets owned by the company. For this reason, the company needs to use a balance sheet to determine the overall Zakatable owned by the company.

Moreover, Zakat has to be paid on the money deposited in the Islamic Banks and in such a case the Zakat will be calculated on capital money and that of the profit. If one complete lunar year has passed for the deposited money and the profit, the wealth is liable to pay Zakat on. However for any investment that leads to profit via interest of any kind, is not eligible for the Zakat.

Islam strictly refrains Muslims from interest and is considered as impure money for it is not the property of the owner. You can give this money to any poor person in need but you cannot give it in the name of Zakat. Zakat is must to be paid from the net profit that is earned thorough halal sources.

Calculating Zakat on Property:

If a person has more than one house with the intention of living and not keeping it to earn some financial benefit, no Zakat is applicable on any such property. But if the property is brought with the intention to be sold to earn profit, Zakat shall be applied on it. If the property is bought and rented and the money is used to meet the daily needs, no Zakat will be applicable.

Calculating Zakat on Payable and Receivables:

On payable no Zakat is applied. While on receivables, if you lent out money and you know that the money will be returned (even if the money is not returned yet), Zakat will be applied on it. Moreover, Zakat can be paid on the receivables together even when the lent money is returned after sometime and if one party is in the process is deceased before the money is received to the receivable no Zakat shall be applied on that money.

Calculating Zakat on Minor Property or Jewelry\Funds:

No Zakat is applicable if jewelry, funds or property is bought for the kids, and are not used by the parents. The Zakat will be applicable on such items once the kids each their age of maturity.

Calculating Zakat on Livestock:

Calculating zakat on livestock is confusing since long. According to the most authentic sources the Zakat on livestock farming is calculated as of 2.5% of the total units of the animals in possession of a person. However the minimum limit is to have 100 units of animal and in such a case the person has to pay 2.5 animal unit of his net live-stock.

Difference between Zakat and Tax:

Tax and Zakat are two entirely different things and we must not compare Zakat with tax. People believe that paying Zakat is a voluntary act while paying the income tax is mandatory. This is a wrong belief. Zakat is one of the basic 5 pillars of Islam and is a must for every eligible Muslim to pay Zakat. While on the other hand tax is paid to the government for the offered services or facilities while Zakat is something completely linked with the religion and has nothing to do with the political stance.

Who can receive Zakat?

You cannot give Zakat to anyone who is in need of money but, Islam has defined a specific set of people who are eligible for Zakat. According to Islam and Quran, there are 8 kinds of people who are eligible for Zakat in Islam, as said by Quran;

“Indeed, [prescribed] charitable offerings are only [to be given] to the poor and the indigent, and to those who work on [administering] it, and to those whose hearts are to be reconciled, and to [free] those in bondage, and to the debt-ridden, and for the cause of God, and to the wayfarer. [This is] an obligation from God. And God is all-knowing, all-wise.” – Al-Tawbah, 9:60

The list of eligible Zakat holders includes the following;

1. Al-Fuqara: These are the people who do not have enough money to fulfill their basic needs or necessities of life.

2. Al-Masakin: They are the people who do not have any kind of income or anything in their possession.

3. The Zakat Collectors: These are the one who are administrating Zakat and belong to any organization who is offering the Zakat collection and distribution services to the Muslim community.

4. New Convertors: It means the one who has newly converted to Islam and have no means of income or survival because they get detached from their family or community.

5. The Captives and Slaves: These are the people who are kept as slaves by others. The Zakat can be given to set these slaves free.

6. The Debt-Ridden: These are the one who are highly in-debt and have no mean to pay off their debts. You can give them Zakat to help them pay their debt.

7. For the Cause of Allah: You can give Zakat to those who are fighting in the path of Islam and Allah Almighty.

8. The Wayfarers: It includes the travellers who are far from their home or are alone in a new place and are in extreme need of money for food or to reach their homes back.

Along with all including Zakat, Islam has defined every rule and regulation to help us play our role in making the world a better place to live, for others and to support who are in need of any kind of help. For this reason, Islam places an emphasis on Zakat and Charity activities.

Should We Give Zakat Only in Ramadan?

It is a major misconception that you can only pay Zakat in the month of Ramadan. An eligible Muslim can pay Zakat at any time of the lunar year. However, to help you keep the check of the cycle, suggested is to pay Zakat in the first month of the year so that you can keep a check of when the year will pass and what is the next time you will need to pay the Zakat. For this reason, you must not wait for the month of Ramadan to pay Zakat. Once you are eligible and liable to pay Zakat, pay it.

Can We Give Zakat to Relatives?

If your relatives are needy and poor and do not have any source of income, you can pay Zakat to them. However, one cannot give Zakat to the parents, spouse, children, and sibling and to any of the person with whom they have a blood relation.

Calculate manually or ask for an expert help, paying Zakat each year is a must for every eligible muslim as it will support other needy people around you. The Holy month of Ramadan is about to come and it is the best time to pay off your Zakat and to start a periodic cycle to keep a check on Zakat related activities in a better way.

Khurram Zahid

The post How to Calculate Your Zakat this Ramadan? appeared first on Smartchoice.pk.

Takaful is another name of car insurance and it allows the premium from the policy holder to be used into funds and to support both the parties in case of any mishap or emergency. The idea of takaful is based on the theory that compliance with Sharia or Islamic Law. It is thus a risk transfer agreement that requires an active participation of both participants and the operators.

The main difference between takaful and conventional car insurance is the way risk is managed in both the cases. It also includes the different mode of management of takaful funds. There are differences between the operators and the participant’s relationships as well.

As compared to conventional insurance, takaful does not support any kind of uncertain activities when we speak about the risk assessment. Management of funds through interest or Riba is also not a part of takaful and these are some of the reasons that make takaful stands different from car insurance.

List of Car Takaful Providers in Pakistan:

Number of Companies are offering car takaful services in Pakistan, the list of which is:

• IGI General Takaful
• Adamjee Motor Takaful
• EFU General takaful
• Jubilee General takaful
• Pak Kuwait Takaful
• Pak Qatar General Takaful
• United General Takaful

List of Car Insurance Companies in Pakistan:

• Adamjee Insurance
• Asia Insurance
• Alfalah Insurance
• Askari General Insurance
• EFU General Pakistan
• Habib Insurance Company
• New Jubilee Insurance
• Shaheen Insurance
• TPL Direct Insurance
• Premier Insurance
• The United Insurance

The Difference?

Here are some of the core differences between the car takaful and conventional car insurance services that are offered to the people in Pakistan:

• The Funding System: The conventional car insurance is based on type of risk transfer management where the risk is removed from the insured vehicle with the help of the premium paid for the policy. While the takaful insurance is based on the mutual benefits of the policy provider and the car holder. This shared funding is also called as a common pool. The manager of the pool is the company that is offering takaful services.

• Surety: In conventional car insurance there is a high level of uncertainty and this is something not appreciated in Islam as well. This uncertainty is linked to the use of the money you have paid for the premium into the sources that can bring both profit or loss. While in car takaful there is a lesser amount of uncertainty as the money you have paid in terms of the premium will be invested in halal sources of earning money or profit and where the positive results are guaranteed or have clear grounds. It can also be called as a conditional donation for the worthy cause.

• In conventional car insurance there are more aspects of investment with the amount paid by the car holders in terms of premium but with the expectation that a handsome amount in terms of compensation will be paid in such a case if the loss they are expecting, does not happen and their car does not meet any accident or serious damage, they will lose the amount they have paid in the name or premium. While on the other hand if you are going for a car takaful services, the benefits of the paid premium will not be lost from the insurers or the car owner, in case there is not such bad incident. Rather both parties settle for a predefined setup to share the money once the policy duration expires.

• In conventional car insurance, any profit earned on the paid premium will be owned by the shareholders, and the policyholder or the owner of the car will not get any return by the end of the day. While we speak about car takaful, the participants there will get a surplus amount will be paid back to them in the name of a relationship of sharing contribution as per decided to be done by the end of the contract.

These are some of the core differences between the conventional car insurance and car takaful services that are available in Pakistan. You can also use the car insurance comparison as well as car takaful comparison tool powered by smartchoice.pk to have a clear idea of what car insurance service suits your needs the most. These tools will also help you save your time and money and make a handsome decision.

On the whole, there is a clear difference between the car takaful and conventional car insurance including the core idea, the benefits and the principles along with the investment activities that help the user to identify and choose any one of them on the basis of their preferences and needs. One can only make a better decision once they revise their needs and demands and what benefits they are looking to earn with the investment.

Khurram Zahid

The post Conventional Car Insurance VS Islamic Car Insurance (Takaful): What’s the Difference? appeared first on Smartchoice.pk.