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Is it permissible in Islam to buy a car on installments?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
Assalam-U-Alaikum. I want to know whether there is a permission in Islam to purchase a car on Installments. As per my knowledge, under installment scheme, you are supposed to pay the actual cost fixed intrest per month. But the cost is predecided by the bank for eg. if the vehicle cost is 4 lakhs, and if you are paying the installments in 3 years, bank will calculate the intrest and give you the final figure of 5.5 lakhs. So the cost of the car is 5.5 lakhs for you, which you are supposed to pay in 3 years. But if you change your plan of making payment in 4 years, then the total value of car will increase. So Please let me know whether we can purchase a car on installment. I can not buy a car by paying entire amount in cash, and car is very important for me to buy. Will be thankful to you for your advise.


(Fatwa: 825/776=B/1430)

Before purchasing the car on instalments, if you agree and fix a period of 3-4 years and the total payable amount is also fixed and you tell him that, for example you are purchasing the car for 5.5 lakhs on the instalments of three years, so this transaction will be valid and lawful.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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