Most Islamic car financing in Malaysia runs on a contract with a name long enough to scare people off: Al-Ijarah Thumma Al-Bai, AITAB for short. The mechanics are simpler than the Arabic. The bank buys the car and leases it to you for an agreed rental; when the final instalment is paid, ownership transfers to you by sale. Lease first, own later. Hong Leong Islamic defines it on its product page in exactly those terms, and Public Islamic puts the full contract name in its product title. This guide explains how AITAB works, who prints their prices (almost nobody), and how to use the one published rate grid in the market to negotiate everywhere else. All product facts were verified from bank websites on 6 August 2026.
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How AITAB differs from a car loan
In a conventional hire purchase, you borrow money at interest and the car secures the debt. In AITAB, there is no loan: the bank owns the car during the lease period and your monthly payment is rental, with a sale at the end transferring ownership. The structure operates under Malaysia's Hire-Purchase Act framework and BNM's Shariah governance, and it changes the fine print in your favour in specific ways: late payment compensation (ta'widh) is capped and non-compounding, and early settlement earns Ibra, a rebate of unearned profit. Bank Islam prints its ta'widh schedule verbatim: 1% per annum on overdue instalments before maturity. Not every bank names AITAB on the page; CIMB and RHB describe hire-and-purchase mechanics and leave the contract label to the PDS, while Bank Muamalat uses a different structure altogether, Murabahah to the Purchase Orderer, for its public-sector product. The label matters less than the document trail: every product here carries a dedicated Islamic PDS.
The one printed rate grid in Malaysia
Bank Islam is the only bank we crawled that prints its full vehicle financing rate grid: new national vehicles 2.35% to 3.15% per annum, new non-national 2.20% to 2.35%, unregistered reconditioned imports 2.35% to 2.70%, used vehicles from 3.65% (1 to 5 years old) and from 3.92% (6 to 10 years old). The standout band is hybrids and EVs at 2.10% to 2.20%, the lowest printed vehicle rate in the market and the only published green discount. Margin runs to 90% of the on-the-road price over up to 9 years, with a fixed and known selling price and Ibra on early settlement. One technical note: profit is allocated monthly on the Sum of Digits method, which front-loads profit within the instalment schedule, a detail that matters if you settle early. Eligibility is fixed-income earners.
The rest of the market: features printed, prices hidden
Maybank Islamic's AITAB Vehicle Financing names and defines the contract, finances 90% of new and unregistered reconditioned vehicles and 85% of second-hand over up to 108 months, and integrates Malaysia's largest dealer network. No rate grid is printed. CIMB Islamic's Hire Purchase-i offers a genuine choice of fixed or variable profit rates, each with its own PDS, plus dedicated auto finance centres; rates live behind a link, not in the page text. RHB Islamic's Vehicle Financing-i calculates profit on a reducing balance (daily rest) basis and its VF-i Flexi Redraw variant is unique in the market: profit charge discounts up to 50% of the total financing amount, a redraw option on excess payments and no exit fee, purpose-built for prepayers. Hong Leong Islamic's Auto Financing-i takes buyers to age 70, the widest eligibility window, and explains AITAB in three steps. Public Islamic prints something nobody else does: a Code of Ethics on Repossession, plus its margin and duration schedule.
The 100% margin options
Two institutions remove the down payment entirely. Bank Rakyat's Vehicle Financing-i (An Naqlu 2) offers up to 100% of the on-the-road price on new national and imported cars over up to 9 years, minimum income RM2,000 monthly, with fees itemised to a level nobody matches: RM28.30 wakalah fee, RM10 stamp duty, no early settlement fee, late charge capped at 1% per annum. The profit rate itself requires a branch quote. Bank Muamalat's Structured Vehicle Financing-i also reaches 100% margin under its named MPO contract, but only for armed forces personnel, government servants and pensioners, with entry age running to 70 (75 at maturity) and a low RM1,800 income floor. Remember what 100% financing means: bigger instalments and a car worth less than the balance in the early years. It solves a cash problem, not a cost problem.
The market in one table
| Bank | Contract disclosure | Printed rates | Margin / tenure | Standout |
|---|---|---|---|---|
| Bank Islam | Mechanics printed, label in PDS | 2.10% to 3.92% full grid | 90% / 9 years | Only printed grid; EV band 2.10% |
| Maybank Islamic | AITAB named and defined | None | 90% new, 85% used / 9 years | Largest dealer network |
| CIMB Islamic | Label in PDS | Via linked rates page | 90% / 9 years | Fixed or variable choice |
| RHB Islamic | Hire-and-purchase described | None | 90% / 9 years | Flexi Redraw, no exit fee |
| Hong Leong Islamic | AITAB named, 3-step explanation | None | Per quote / to age 70 | Widest age eligibility |
| Public Islamic | AITAB in product title | None | Schedule published / 9 years | Repossession ethics code |
| Bank Rakyat | Tawarruq named | Branch quote | 100% OTR / 9 years | Itemised fees, no settlement fee |
| Bank Muamalat | MPO named | None | 100% / per PDS | Pensioners to 75 at maturity |
How to negotiate in a no-price market
Since only one bank publishes rates, Bank Islam's grid is everyone's benchmark whether they like it or not. Bring the printed band for your vehicle category to every other quote: 2.35% to 3.15% for a new national car, 2.10% to 2.20% for an EV, and ask the bank to beat it in writing. Then compare three other terms: the profit calculation method (reducing balance rewards prepayment; Sum of Digits and flat methods do not), the early settlement treatment (RHB's no-exit-fee redraw versus standard Ibra), and the Takaful bundle (HPRTT premiums vary and are usually financed into the facility, so they accrue profit too). If you are buying used, note the printed reality that used-vehicle rates run roughly 1.3 to 1.8 percentage points above new rates at the only bank that shows them.
One regulatory change hangs over every quote you will get this year: the Hire Purchase (Amendment) Act 2026 moves new agreements to the fixed rate reducing balance method from 1 June 2026, a change Public Islamic and CIMB both flag with dated notices. What that means for your instalment arithmetic is covered in our HPAA 2026 explainer. And if you are still weighing bank choice more broadly, the market context sits in our complete guide to Islamic banking in Malaysia.
Frequently asked questions
Who actually owns the car during an AITAB lease?
The bank owns it during the lease period; you are the lessee with a contractual right to acquire ownership through the end-of-term sale. Hong Leong Islamic's page states the transfer happens on the final instalment. Practically, you register, insure (through Takaful) and maintain the vehicle, and the repossession rules of the Hire-Purchase Act framework protect you during arrears, which is one reason Public Islamic's published repossession ethics code is worth reading.
Is AITAB more expensive than conventional hire purchase?
The only printed Islamic grid, Bank Islam's 2.10% to 3.92%, sits in the same territory as conventional hire purchase pricing for equivalent vehicle categories. There is no structural premium visible in published numbers. Since most banks quote rather than print, the honest answer is that your quote depends more on your profile and the specific bank than on the contract family.
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Can I settle an AITAB facility early without penalty?
Yes, with Ibra: the rebate of unearned profit is a standard feature, and Bank Rakyat and RHB explicitly print no early settlement or exit fee. The amount you save depends on the profit allocation method, which is why the Sum of Digits detail at Bank Islam and the reducing balance method at RHB deserve attention before you sign, not after.