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Leasing vs Financing Car – Permissible Cases

Answered as per Hanafi Fiqh by ShariahBoard.org

Assalamualaikum,

Please shed more light regarding islamic stance on leasing and financing a car, is any case allowed in islam and the reason behind it.

Jazakallah Khair

 

الجواب وباللہ التوفیق

In general, Shariah does not allow leasing a car since it involves interest.

But due to payment in installments:

  1. if the interest is added to the original price of the vehicle to establish the final price.
  2. if final price of the car remains exact same irrespective of changes in the duration of lease.

When above conditions are satisfied, the lease becomes acceptable. 

واللہ اعلم بالصواب

This answer was collected from Shariahboard.org. It was established under the supervision of the eminent faqih of our era, Hazrat Shah Mufti Mohammed Navalur Rahman damat barakatuhum.

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