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Buying a car through Bank Financing

Answered according to Hanafi Fiqh by Fatwa.ca

Question:

I need fatwa about buying a car by financing where the bank will pay the money and then buyer will pay to the bank by installment with bank interest

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ʿalaykum wa-rahmatullāhi wa-barakātuh.

We appreciate your zeal to seek out halal within your dealings. Giving and taking of interest is haram (prohibited). This is explicitly mentioned in the Qur’an and Hadith.

وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا

“And Allah has made business lawful and prohibited interest…” (Qu’an 2:275)

The Messenger of Allah ﷺ cursed the one who give or takes interest.

عَنْ جَابِرٍ رَضِيَ اللَّهُ عَنْهُ قَالَ: لَعَنَ رَسُولَ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ آكِلَ الرِّبَا وَمُوَكِلَهُ وَكَاتِبَهُ وَشَاهِدَيْهِ وَقَالَ: هُمْ سَوَاءٌ

Sayiduna Jabir radi Allahu anhu narrates that Allah’s Messenger ﷺ cursed the one who takes interest, and the one who pays it, and the one who records it, and the two witnesses to it, saying they were alike (in the share of sin). [1] 

Hence buying a car through financing wherein the bank will pay the money and then you pay the bank by installment with interest, is not permissible. [2]

As an alternative, we suggest that you look for 0% APR options which are available at many new & used car dealerships. However, before finalizing any contract seek consultation from experienced Mufti of repute in the field, as some contracts may not reflect Shariah Compliancy even if they are 0% APR.

And Allah Ta’āla Knows Best

Maulana Tameem Ahmadi
Union City, CA.
U.S.A

Checked and Approved by:

Mufti Faisal bin Abdul Hameed al-Mahmudi
www.fatwa.ca

[1] صحيح مسلم (3/ 1219)، #1598 ، دار إحياء التراث العربي

عن جابر، قال: «لعن رسول الله صلى الله عليه وسلم آكل الربا، ومؤكله، وكاتبه، وشاهديه»، وقال: «هم سواء»

[2]  (رد المحتار على الدر المختار: 7/298 : مطبعة دار احياء التراث 1419)
(قوله كل قرض جر نفعا حرام) أي إذا كان مشروطا كما علم مما نقله عن البحر

(كتاب الأصل للامام محمد بن الحسن الشيباني: ٣/٢٢)
وحدثنا عن محمد ابن سالم عن عامر الشعبي أنه كان يكره أن يقول الرجل للرجل أقرضْني، فيقول: لا حتى أبيعك.

المبسوط للسرخسي (14/ 36)، دار المعرفة
قال السر خسي: وإنما أراد بهذا إثبات كراهية العينة وهو أن يبيعه ما يساوي عشرة بخمسة عشر ليبيعه المستقرض بعشرة فيحصل للمقرض زيادة، وهذا في معنى قرض جرّ منفعة.

This answer was collected from Fatwa.ca, which is a fatwa portal operated by Mufti Faisal al Mahmudi from Canada. 

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