The Official Site of Shaykh Abdul Raheem
(Damat Barakaatuhum)

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The Official Site of Shaykh Abdul Raheem
(Damat Barakaatuhum)

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Q505: car on finance

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Question:
I am thinking of purchasing a car on finance. The terms of the deal are you pay an initial deposit which is non-refundable and then pay monthly installments for 3 years and they are offering free insurance and road tax. You do not own the car at the end of the contract but you can exchange the car for new one and keep paying monthly installments. Is this type of transaction allowed in sharia.

Answer: Yes, it is allowed, as long as the total payment is known and interest is not involved.
This is due to not having enough money to buy the car, and in the shariah there is plenty of flexibility for those who are not well off.

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