Selling an item for a price higher than its immediate cash price
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The first question of Fatwa No. ( 1638 ):
Q1: A man wanted to get married, for example, but he did not have enough money for the bridal gift. So he went to a shop owner, and the shop owner said to him: “I will sell you a Datsun car for seventeen thousand Saudi Riyals on credit, to be paid in full at the end of the year.” Is this riba (usury or interest)? And is it, in return, lawful or forbidden? Knowing that the cash value of the car is only ten thousand and five hundred Saudi Riyals, and this car is the condition upon which they agreed, and it is the core of the condition between this seller and the one who wants to get married.
A1: If the matter is as mentioned, where a person buys a car from another for a price higher than what it is sold for in immediate cash, so that the buyer can sell it to whomever he wishes—other than the one who sold it to him and those in his position—then it is not riba (usury or interest), but rather it is a valid and permissible sale contract. However, if he buys the car, for example, from
a person for the purpose of returning it to him for a lower immediate cash price than what he bought it for, then that is a cash-for-cash sale with a difference in amount, and it is the riba (usury or interest) that Allah the Exalted and His Messenger (peace and blessings be upon him) have forbidden. The contract regarding the car is a sham intended to deceive and circumvent the riba (usury or interest), and to consume wealth unjustly. Likewise, if the buyer sells the car to a person known to be an associate of the first seller in his business, or to an intermediary who colluded with him so that the car ultimately returns to the first seller, then all of this is deception and circumvention of the riba (usury or interest).
Q1: A man wanted to get married, for example, but he did not have enough money for the bridal gift. So he went to a shop owner, and the shop owner said to him: “I will sell you a Datsun car for seventeen thousand Saudi Riyals on credit, to be paid in full at the end of the year.” Is this riba (usury or interest)? And is it, in return, lawful or forbidden? Knowing that the cash value of the car is only ten thousand and five hundred Saudi Riyals, and this car is the condition upon which they agreed, and it is the core of the condition between this seller and the one who wants to get married.
A1: If the matter is as mentioned, where a person buys a car from another for a price higher than what it is sold for in immediate cash, so that the buyer can sell it to whomever he wishes—other than the one who sold it to him and those in his position—then it is not riba (usury or interest), but rather it is a valid and permissible sale contract. However, if he buys the car, for example, from
a person for the purpose of returning it to him for a lower immediate cash price than what he bought it for, then that is a cash-for-cash sale with a difference in amount, and it is the riba (usury or interest) that Allah the Exalted and His Messenger (peace and blessings be upon him) have forbidden. The contract regarding the car is a sham intended to deceive and circumvent the riba (usury or interest), and to consume wealth unjustly. Likewise, if the buyer sells the car to a person known to be an associate of the first seller in his business, or to an intermediary who colluded with him so that the car ultimately returns to the first seller, then all of this is deception and circumvention of the riba (usury or interest).
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.