To prevent any suspicions or fraud to obtain the financing amount at a reduced interest rate

Banks that do not finance the purchase of used cars from first-degree relatives

• Banks require an evaluation of the actual car value through one of their approved showrooms.

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• Tamer Abu Bakr: “The profit on car financing is the least, as it remains actually mortgaged to the bank until the full installments are paid.”

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Two bankers said, "Banks do not give financing to buy a used car from first-degree relatives, such as a brother, father, mother, or sister, in order to prevent any suspicions or fraud to obtain the financing amount at a reduced interest rate, as the lowest bank financing rate is usually for the purchase of cars." .

This came, in response to complaints received by «Emirates Today», from bank dealers, who applied to obtain financing from the bank to which their salary is transferred for the purpose of purchasing a car owned by a brother or father, stressing that they have the right to take advantage of the opportunity to buy a car that is almost new or in good condition, which he offers Father, brother or sister for sale, and wondering: “Why do banks allow financing the purchase of a car from any other person, as long as the conditions apply, while not allowing it from first-degree relatives?”

They pointed out that “this prohibition opens the door to committing violations and fictitious sales of the wife or second-degree relatives, until financing is obtained,” calling on banks to have more flexibility in the decisions that are taken, especially since the bank’s right is guaranteed in the car that is being financed, as it remains owned. To the financier bank until the completion of payment for it.

For its part, «Emirates Today» made a direct question in the car financing section of a number of large banks, in which the largest percentage of customers are concentrated, and the answer came by refusing to grant a car loan, if the customer wanted to buy it from a first-degree relative.

An employee in the car financing department at a national bank in Abu Dhabi said: “This problem is solved by transferring the ownership of the car to a third party in a fictitious way, until the financing procedures are completed and the agreed amount is disbursed,” noting that the banks’ decision in this matter should really be reconsidered. in it".

Banker Tamer Abu Bakr added, “Bank financing for cars that are purchased from individuals is subject to several conditions, including that the car is not purchased from a first-degree relative, whether father, mother, brother or sister, while it can be financed if the seller is any other person.” He explained that “this prohibition has been in place for many years in a large number of banks, to address any suspicion of exploitation or fraud to obtain the amount of financing only.” Installments. Therefore, in order to prevent the exploitation of this, it is forbidden to finance any car that a party wishes to buy from his brother, father, mother, sister, son or daughter, i.e. all first-degree relatives.

Tamer said, "There are various options available to finance the purchase of a car through banks, whether new or used, in addition to buying from individuals, with the exception of first-degree relatives."

He added, "Banks are accustomed, in the event of financing a car purchased from individuals, to request an evaluation of its actual value through one of its accredited car showrooms, which usually asks them to evaluate permanently according to agreements signed with them, and then the financing amount is determined and approved."

For his part, banker Mustafa El-Gammal said, “There are banks that finance the purchase of the car from first-degree relatives, but on the condition that it is not mortgaged to any other bank, and that it is evaluated if it is used, inside one of the showrooms approved by the bank,” noting that “banks are strict The other issue in granting funding may be subject to previous experiences that imposed this internal policy to hedge against any negative practices.

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