Option of purchasing a car from the bank after renting it from the bank

Answered according to Hanafi Fiqh by

Q: Islam banks are giving away cars on the principle of Ijarah.

The bank buys a car and gives it to you on a monthly rent specified in the contract. The bank also keeps a security deposit. The ownership of the car remains with the bank during the rental period. You have the option to return the car at any point in time and get your security deposit back but the bank charges you a certain amount of money if you return the car before the expiry of the rental agreement duration specified in the contract. At the end of the rental agreement, you can either return the car and get your security deposit back OR get the ownership of the car transferred in your name in which case you have to forfeit your security deposit and you might even have to pay an additional fee.

Is transfer of ownership at the end of a rental agreement is permissible in Islam?


A: If the deposit was part of the payment and purchase fee then it is permissible.

And Allah Ta’ala (الله تعالى) knows best.


Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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