I bought a car through al-ijarah thuma al-bai'(AITAB), which mean hire-purchase. The bank claim it is Islamic concept. The concept is I choose a car from the car dealer, then I approach bank. Bank will buy it for me and sell to me through hire-purchase AITAB. The problem is now I am aware that this concept contains 2 aqad at the same time. I pay monthly installment as hire and at the end of payment is sold to me.
1. The question is whether this concept is truly islamic or not. I am confused and not clearly understand.
2. How the true Islamic transaction should be so that Muslim can buy car or house which the price always imposible to pay in cash?
Jazakumullah khairan kathira.
In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatoh
The concept of al-ijara thuma al-bai or al-ijara muntahiya bittamleek is valid in Shariah on condition that the contract is structured correctly. In order for us to comment on the permissibility of your contract kindly forward us the contract. Nevertheless, the concept of al-ijara thuma al-bai or al-ijara muntahiya bittamleek will be that the lessor either promises to sell or gift the leased item to the lessee upon termination of the lease. This will be a unilateral promise which is morally binding. If the lessor does not fulfill their promise, that cannot be enforced against him. The promise to sell or gift the item will be totally independent from the lease contract. It should be understood that al-ijara thuma al-bai is different from a conventional hire purchase scheme in that there is a hiring and purchase agreement in one contract which is prohibited because there are two contracts in one. Initially the item is hired and upon the last payment, the lessee now becomes the owner.
And Allah knows best
Ml. Ishaq E. Moosa,
Student Darul Iftaa
Checked and Approved by:
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In’aamiyyah