Selling spot dirhams for more dirhams on credit
Machine translationRead the Arabic original
Fatwa number ( 12277 )
Q: I inform your eminence that I sell cars for deferred payment, paid in installments over a period of two years or more. However, five years ago, one of my friends asked me for a new car to be paid for in deferred installments. I did not have a new car at the time. He said to me: "Buy a new car from the agency, sell it in the market, and give me its value." By this, he meant that I should act as his agent and serve him, because he was busy renovating his house. I asked him to come with me when I bought the car for him, and I would hand it over to him so he could spend it as he wished. But the aforementioned person told me that he could not leave his work, and that he was appointing me as his agent to buy the car, sell it, and bring him its value. So I went to the agency and found that the price of the car at that time was 14,500 riyals. I said to myself: If I buy a car at this price and put it up for sale, it will not recover its capital, and this is a fact. So, to prevent my friend from losing money, I brought him the value of the car at the agency, which was 14,500, and told him: "I bought you a car from the agency and sold it in the auction market for its capital." He accepted this and thanked me. I recorded promissory notes against him for 22,000 riyals, meaning a profit of 7,500, since we had agreed on this value and this profit previously, before I carried out this transaction. This was because my friend knew the prices of cars at the agency and was willing to pay me that profit. This amount was paid by my friend over a period of two and a half years. Therefore, I am confused
about this action of mine. Should I return the profit to this person, or give it in charity, or repent for having engaged in such a transaction? I note that my right remained with this person for a period that was not short. I am now, praise be to Allah, aware of the method of buying and selling, and I know what is lawful for me and what is forbidden, and I have abstained from the path of forbidden riba. However, this action of mine has continued to confuse me greatly. I ask you to give me the fatwa on this matter, and to guide and direct me to what I must do. May Allah reward you for Islam and the Muslims with the best reward, and may Allah protect you.
A: You do not deserve the mentioned profit; because it is selling spot dirhams for more dirhams on credit, and it is forbidden by the Shari'ah. It is obligatory for you to return the excess amount to him; due to the invalidity of your transaction.
Q: I inform your eminence that I sell cars for deferred payment, paid in installments over a period of two years or more. However, five years ago, one of my friends asked me for a new car to be paid for in deferred installments. I did not have a new car at the time. He said to me: "Buy a new car from the agency, sell it in the market, and give me its value." By this, he meant that I should act as his agent and serve him, because he was busy renovating his house. I asked him to come with me when I bought the car for him, and I would hand it over to him so he could spend it as he wished. But the aforementioned person told me that he could not leave his work, and that he was appointing me as his agent to buy the car, sell it, and bring him its value. So I went to the agency and found that the price of the car at that time was 14,500 riyals. I said to myself: If I buy a car at this price and put it up for sale, it will not recover its capital, and this is a fact. So, to prevent my friend from losing money, I brought him the value of the car at the agency, which was 14,500, and told him: "I bought you a car from the agency and sold it in the auction market for its capital." He accepted this and thanked me. I recorded promissory notes against him for 22,000 riyals, meaning a profit of 7,500, since we had agreed on this value and this profit previously, before I carried out this transaction. This was because my friend knew the prices of cars at the agency and was willing to pay me that profit. This amount was paid by my friend over a period of two and a half years. Therefore, I am confused
about this action of mine. Should I return the profit to this person, or give it in charity, or repent for having engaged in such a transaction? I note that my right remained with this person for a period that was not short. I am now, praise be to Allah, aware of the method of buying and selling, and I know what is lawful for me and what is forbidden, and I have abstained from the path of forbidden riba. However, this action of mine has continued to confuse me greatly. I ask you to give me the fatwa on this matter, and to guide and direct me to what I must do. May Allah reward you for Islam and the Muslims with the best reward, and may Allah protect you.
A: You do not deserve the mentioned profit; because it is selling spot dirhams for more dirhams on credit, and it is forbidden by the Shari'ah. It is obligatory for you to return the excess amount to him; due to the invalidity of your transaction.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.