Buying a car on installment and then wanting to exchange it, so the company cancels the first contract and treats it as a lease
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Fatwa number ( 21665 )
Q: I bought a car nine months ago for 53,000 riyals on installment, with a monthly payment of 1,073 riyals. I wanted to buy a larger car from the same company from which I bought the first car. They told me that the company would take the first car, cancel the first contract, and count the nine installments I paid them as rent for the first car, and write a new contract for the second car, and I would start new installments. Is there any doubt in this matter? May Allah reward you for the Muslims?
A: What is mentioned in the question falls under the category of iqalah, which means rejecting the contract, the seller taking back the car, and the buyer taking back the price. However, converting the contract to a lease after this period has passed is not
correct. But it is permissible for you to sell the car for its value, whether to the seller who has received part of its value along with the change of car, or to someone else, and buy another car in its place. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: I bought a car nine months ago for 53,000 riyals on installment, with a monthly payment of 1,073 riyals. I wanted to buy a larger car from the same company from which I bought the first car. They told me that the company would take the first car, cancel the first contract, and count the nine installments I paid them as rent for the first car, and write a new contract for the second car, and I would start new installments. Is there any doubt in this matter? May Allah reward you for the Muslims?
A: What is mentioned in the question falls under the category of iqalah, which means rejecting the contract, the seller taking back the car, and the buyer taking back the price. However, converting the contract to a lease after this period has passed is not
correct. But it is permissible for you to sell the car for its value, whether to the seller who has received part of its value along with the change of car, or to someone else, and buy another car in its place. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.