Answer
(Fatwa: 1696/1165/L=1432)
It is lawful to buy a car on instalments. However it is necessary to fix the amount at the time of dealing for example: I buy this car in four lakh cash and rest amount is due which I will pay in instalments. The price should not be kept unclear or conditioned with anything. Also one should not rely on bank for the same i.e. a bank pays amount and receives extra amount from the buyer. It is interest which is haram as per the Shariah. However if one deals with bank in this way that first the bank buys that car and includes as much amount as the bank wishes as interest in its original price and sells it to you and you pay it on instalments then it is allowable as per the Shariah.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband