What is the ruling on buying a car through a bank on installments?
Machine translationRead the Arabic original
Question:
A man wants to buy a car but does not have the money, so he asked the bank to buy the car for him, and the bank sells it to this man in installments. Is this included in riba (usury or interest)?
Answer:
If the bank has a car or cars prepared for sale, there is no harm in buying from them. However, if they do not have anything and only buy it for you—what is it?—they buy it for you, pay the price, and take an increase from you, then this is riba. They pay the price as a loan they lend to you and pay it to the car seller, then they recover it with an increase. This is a loan; this loan becomes riba. This is not a sale.
A man wants to buy a car but does not have the money, so he asked the bank to buy the car for him, and the bank sells it to this man in installments. Is this included in riba (usury or interest)?
Answer:
If the bank has a car or cars prepared for sale, there is no harm in buying from them. However, if they do not have anything and only buy it for you—what is it?—they buy it for you, pay the price, and take an increase from you, then this is riba. They pay the price as a loan they lend to you and pay it to the car seller, then they recover it with an increase. This is a loan; this loan becomes riba. This is not a sale.
Source
قناة «العلامة الدكتور صالح الفوزان»، ما حكم شراء السيارة عن طريق البنك بالأقساط؟ #فتاوى الفوزان — youtube.com
The Arabic text is a machine transcription of the audio recording.