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f:352 -    Buying an auto on finance
Country : India,
Name : Fazal Khan
Question:     Sir! Can we buy an auto on installments (finance)?

Answer:     On taking an auto on finance, the amount is returned in installments.

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

As Allah Most High says in Surah Baqarah-275

Allah has declared trading (buying and selling) lawful and usury unlawful.

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, etc. 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 nonpayment 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 an auto on installments with the above conditions is permissible in the light of the Shariah.

And Allah Most High knows best.

Mufti Syed Ziauddin Naqshbandi Qadri,

[Professor, Islamic Law, Jamia Nizamia,
Founder-Director, Abul Hasanaat Islamic Research Center]
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