Purchasing a vehicle from the bank

If the bank purchases the vehicle directly from the car dealer, takes possession of the motor vehicle, and then sells it to you at a fixed price in fixed monthly installments, then the transaction will be in order. However, you should ensure that the finance contract is free of any clauses that are against Shariah such as, enforcing insurance upon the buyer, or the penalty of default clause, etc. We have found that majority of the banks enforce insurance upon their clients and impose a penalty for late payment, or for missing a payment. In this case, it will not be permissible to purchase the vehicle from the bank.