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Thursday, July 4, 2013

Fathwa - Buying a car through a finance company

Question
I would like to buy a car through a finance company paying a down
payment and rest will be in 36 months installments. My question is,
there will be an interest calculation on this deal. Hence the car
company tied up a deal with a certain finance company, i will not able
to go for any other finance company. Moreover, i also working in the
same car company and the company is giving a staff discount onthis
deal and that amount will be higher than the total interest. pls.
clarify.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify
that there is none worthy of worship except Allaah, and that
MuhammadisHis slave and Messenger.
If the finance company owns the car first and thecar becomes in its
possession before it sells it to you and the company does not set a
condition that you will be fined in case of delay in payment, then it
is permissible for you to deal with it, but if the company only pays
the price on your behalf to the car company and then it gets the price
from you with interest, then this is Riba (interest and/or usury)
which is forbidden.
For more benefit on purchasing by installment and its conditions and
the permissible and impermissible method of buying by installment,
Allaah Knows best.
Editor and Publisher,Psychologyist at - INDIA

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