One of my friends is engaged in rent a car business. He purchased a car through bank financing on instalment basis payable in five years. After purchasing the car he offered me to become a partner in that car on 50% basis and to pay Rs.150,000 as down payment. The written agreement we signed states that I have become a partner in this car by paying down payment of Rs.150,000 and the balance instalments being payable to bank will also be paid on 50% basis. The car will be rented out and the profit will be divided on 50% basis after deduction of all expenses i.e. bank instalment, other incidental expenses for repair and salary of driver etc. After the instalments are paid in full the car will then be sold and the sale price will be distributed among both of us on 50% basis. Is this business ok and permissible in Islam?
The partnership between you and your friend is correct. By putting the Rs 150 000 you become a 50% partner in the car. Since you are a equal partner in the car all costs relating to the will have to be shared accordingly. Once the car has been sold, the money will be shared equally.
And Allah Knows Best
Mufti Ebrahim Desai