Head On: Camry vs Accord

img_gallery011camry11Eversince Honda introduced Accord & Toyota launched Camry as their up-market luxury sedan models there has been tough head-on competition between the two.

Although the sales figures suggest that Accord has been outselling Camry looking at their specs the reason isn’t clear. Both have identical 70-litre fuel tanks, near-identical engine displacements (Accord:2354cc & Camry:2362cc) and similar Torque Ratios: 226Nm/4300rpm for Accord while for Camry it is 224Nm/6000rpm.

Top speed of Camry is listed on Toyota Indus Motors (www.indus-motors.com.pk) as 211kph for Manual Transmission version and 204kph for Automatic Transmission. Honda Pakistan (www.honda.com.pk) being more concerned with Safety & Environment hasn’t listed a top speed instead it focuses on the safety / environment-friendly features of the car.

Finally as always it all boils down to the physical ‘looks’ of the car & price of both cars. In that department Accord having a more sleek/elegant & less ‘bulky’ design that Camry (see photos for evidence) wins’ hearts & minds’ of the customer hands-down.

The other factor helping customers decide in favour of Accord is the price tag Rs.4.699M (for A/T) while Camry retails for Rs.5.999M (M/T) to Rs.6.199M (A/T).

Can’t believe this super car is an EV!

mercedes-benz-sls-amg-gullwing-prototype_3mercedes-benz-sls-amg-gullwing-prototype_11A zero-emission supercar, tentatively named LS AMG eDrive, features 4 electric motors with a combined output of 392 kW (526 hp) and 880 Nm (649 lb-ft) of torque enabling it to rocket from 0-100 km/h in around 4 seconds.

This compares favourably as a matter of fact on par with the petrol-driven 6.3-liter (6208cc) V8 powered (571 hp and 650 Nm) SLS that accomplishes the same task in 3.8 seconds. The stats maybe okay for the petrol version but the electric version is as good as its gets (for now anyway).

In a statement, Mercedes-AMG GmbH’s CEO Volker Mornhinweg said, “With the SLS AMG with electric drive, we wanted to redefine the super sports car. For us, it is not just about responsibility. We attach just as much importance to excitement and classic AMG performance.”

I surely believe thay have. Its expected that the car may well be in production by 2011. When it does start commercial  production it will offer fierce competition to Tesla Roadster eV & Lightning GT Electric Sportscar (both already in production phase).

PS: Photos may not  depict the final production version as it has been shielded by the manufacturer & pix are only ‘spy photos’ of the prototype.

The art of Leasing a Car

Car leasing today seems to have become a hard science with all the islamic/unislamic/fixed-rate/KIBOR-linked rate/flexible-tenure/flexible-downpayment/insurance options ‘mumbo-jumbo’ and what not but infact it is as much an art as painting or photography. Before I confuse you further with my ‘Science of Art’ lecture here is me breaking my “banker’s code” to let you in on all the unpleasant secret “they won’t tell you” while selling you a car lease.

According to howstuffworks.com website, Leasing has two principal benefits:

(1) You drive a newer vehicle that is always under warranty and seldom needs more than routine maintenance.

and

(2) you often get a larger, more luxurious, better-equipped car.

I believe another very improtant ‘benefit’ missing from the list is the commission offered to the dealer/lease-salesperson & strictly-religious vs moderate orientation. Meaning that even in today’s day & age the car dealer or lease/loan salesperson can force you to get a lease or loan depending on which makes them more richer.

For people working strictly on commission basis the single most important motivation is how much they get out of each deal so beware of them. The people employed by the bank/FI on salary basis are genrally more reliable in their committed offerings. I am just saying that be careful and make sure that the person selling you the car lease is not just making forced sales & expecting no repeat sales from satisfactory regular clients. Let this be your first lesson while leasing a car – NO BROKERS – neither car dealing ones nore lease pushing ones.

Having already discussed the major differences between conventional Leasing & Ijarah Financing (Islamic mode) the next post will deal with KIBOR & how rates get pegged to it including a detail about its merits and demerits.

Car Leasing vs Car Ijarah

The major differences between Car Ijarah & Car Leasing are as follows:

Rights & liabilities of Owner v/s User

An Islamic Ijarah is an asset-based contract, i.e. the Lessor should have ownership of the asset during the period of the contract. Under Islamic Shariah, all ownership related rights and liabilities should lie with the owner while all usage-related rights and liabilities should lie with the user.

A conventional lease contract does not distinguish between nature of these liabilities and places all liabilities on the user of the asset, contradictory to Islamic Shariah.

Continuation of lease rentals in case of total loss or theft of vehicle

If the leased vehicle is stolen or completely destroyed, the conventional leasing company continues charging the lease rent till the settlement of the Insurance claim.

Under the Islamic system, rent is consideration for usage of the leased asset, and if the asset has been stolen or destroyed, the concept of rental becomes void.

Takaful instead of Insurance

Legally (in accordance to Pakistan’s Law and Regulations), it is required for all leasing entities to insure the leased assets. As such, Islamic Banks insure their assets through Takaful only, which is Islamic product for insurance. Takaful will be explained in detail in future postings.

Permissibility for Penalty of Late Payment of Rent under Islamic Shariah

In most contemporary financial leases, an extra monetary amount is charged, in their income, if the rent is not paid on time. This extra amount is the considered as Riba (usury) and is Haram.

Under Ijarah, the Lessee may be asked to undertake, that if he fails to pay rent on its due date, he will pay certain amount to a charity, which will be administered through the Islamic Bank. For this purpose the bank maintains a charity fund where such amounts may be credited and disbursed for charitable purpose.

If you are wondering how does it effect the installments?

The answer is unfortunately, not much.

For a car priced at an even Million Rupees with 50% downpayment and a 3 year tenor the rental/instalment payments are incredibly similar:

Bank Alfalah @ 19% with 3.15% insurance: Rs.20953/month

BankIslami with ‘profit’ & 3.15%insurance: Rs.20585/month