Car Finance Agreement Template for Pakistan

The Car Finance Agreement is a crucial document used in Pakistan's banking and automotive sectors when a customer requires financing to purchase a vehicle. This agreement is designed to comply with Pakistani banking regulations, including the Financial Institutions (Recovery of Finances) Ordinance 2001 and relevant State Bank of Pakistan directives. It can be used for both consumer and commercial vehicle financing, incorporating necessary provisions for conventional or Islamic financing structures. The document typically includes detailed terms about the vehicle, financing amount, markup rates, payment schedule, security arrangements, insurance requirements, and the rights and obligations of all parties involved. It's essential for establishing a legally binding framework that protects the interests of both the financial institution and the borrower while ensuring regulatory compliance.

1. Parties: Identifies the Finance Company (the 'Financier') and the Customer (the 'Borrower')

2. Background: Brief context explaining the purpose of the agreement and the intention of the parties

3. Definitions: Defines key terms used throughout the agreement

4. Vehicle Details: Specific details of the financed vehicle including make, model, year, and registration number

5. Finance Terms: Core financial terms including principal amount, markup rate, tenure, and total payable amount

6. Payment Terms: Details of installment amounts, payment schedule, and payment methods

7. Security Arrangements: Details of security/collateral including registration of charge on vehicle

8. Insurance Requirements: Mandatory insurance requirements and related obligations

9. Warranties and Representations: Warranties given by both parties regarding their capacity and authority

10. Borrower Covenants: Ongoing obligations of the borrower regarding vehicle maintenance and use

11. Events of Default: Circumstances constituting default and consequences thereof

12. Termination: Conditions and process for early termination or completion of the agreement

13. Governing Law and Jurisdiction: Confirms Pakistani law as governing law and specifies jurisdiction for disputes