Buying a car in another person's name and then selling it to him on installments with an increase
Machine translationRead the Arabic original
Question:
He says: Honorable Shaykh, may Allah grant you success. One of them said to his colleague, "Go to any car showroom and choose a car. He will buy it and register it in his name, then sell it to you on installments with an increase in the price. After he has collected the full amount, he will transfer it to my colleague's name." Question: Is this transaction religiously valid and correct?
Answer:
No, this is not the case where he bought the car for himself, owned it, and then sold it to someone else. Rather, he bought it for the other person, paid the price, and is recovering it with an increase. This is riba (usury or interest). This is considered a loan: he lent him the price and is recovering more than he lent. This is riba. Yes.
He says: Honorable Shaykh, may Allah grant you success. One of them said to his colleague, "Go to any car showroom and choose a car. He will buy it and register it in his name, then sell it to you on installments with an increase in the price. After he has collected the full amount, he will transfer it to my colleague's name." Question: Is this transaction religiously valid and correct?
Answer:
No, this is not the case where he bought the car for himself, owned it, and then sold it to someone else. Rather, he bought it for the other person, paid the price, and is recovering it with an increase. This is riba (usury or interest). This is considered a loan: he lent him the price and is recovering more than he lent. This is riba. Yes.
Source
شرح كتاب المنتقى من أخبار المصطفى صلى الله عليه وسلم، بداية من باب اشتراط دخول الوقت للتيمم — islamhouse.com (1:05:09)
The Arabic text is a machine transcription of the audio recording.