There are only two methods of purchasing a vehicle these days. First, have the entire cash at hand and pick up your car. Or, making monthly payments over time which bears interest, say 10%. I have spoken with a sheikh who stated that, the extra money or interest paid over time can be viewed as a service charge by the car dealer and hence becomes halaal. Is this true? In my case, I have found a dealer that is offering a payment plan of 0% interest rate for 4 years, after which, if balance is still due on the account, the interest will apply. If Allah wishes, I plan to complete my payments before the 4 year period is up. But I’m still signing a contract that states that I’m willing to pay interest if anything happens. Is such contract Haraam? Please advise on this matter, May Allah Be With you.
Answer:
If you intend paying your instalments timeously and avoid paying interest,
you will be excused for signing that contract.
and Allah Ta’ala Knows Best
Mufti Ebrahim Desai
FATWA DEPT.