I went to a car financer, he gave me the following break up; on road price 8,42,000rs loan amount 5,90,000 monthly instalments for 3 years 19,765. So ultimate price of vehicle will be 9,64,480rs, an excess of 1,21,540rs. If i keep all my instalments on time is this deal allowed, he says that he has calculated the above on a interest rate of 12%, but for me it is just extra profit for him helping me to but the car, regardless of what he calls it if I keep up the payments the deal will be exactly as mentioned and no change shall occur.
Answer:
(Fatwa: 1050/982=D/1429)
If the financer purchases the car and includes his profit in the total price (though in the name of interest) then sells the car to you and you pay the total price on monthly instalments then it is lawful.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband