BUYING CAR OR HOUSE ON INSTALLEMENTS

Buying or selling, whether it is with paying money then and there or on loan, whether the payment is made all at once or in installments, is valid and permissible with a few conditions.

As Allah Ta'ala says in (Surah Baqarah-275)

This verse mentions that buying and selling is Halal (permissible).  In this permission, buying with spot payment and on loan, both are included regardless of whether the payment is made lump sum or in installments.

The difference between the price on spot payment and installments, the time period of installments and the difference in price based on the number of goods is all left to the discretion of the buyer and the seller. 

 However, it is better to decide everything clearly beforehand.  It is also necessary to decide the number of installments and their time period well in advance.  Increasing the amount due to non-payment after deciding all these details comes under usury (Sud), which is prohibited in Islam.  Thus, the amount decided at the time of the deal, whether it is less or more, only that amount is to be paid.

As given in ("Minhatul Khaliq 'Alal Bahr Ur Raiq, Vol. 5, Pg. No: 280 and "Badai Us Sanai", Vol. 4, Pg. No: 407)

Buying cars or houses on installments with the above conditions is permissible in the light of the Shariah.