If I buy a car and sell it on installment while it is still in my name, is this permissible?
Machine translationRead the Arabic original
The Shaykh : I don't know about installment sales; what is their ruling?
The questioner : You are saying that the car is sitting there and hasn't moved.
The Shaykh : This is a buy-back sale ('inah).
The questioner : But I bought it today in my name, I rode in the car, and I wanted to sell it on installment, and my profit was... is it forbidden?
The Shaykh : Installment sales are not permissible as long as you take an increase for the installment sale over the cash sale, do you understand?
The questioner : What about, for example, wheat or barley or something like that?
The Shaykh : This is a forward sale (salam), which is a different matter. A forward sale differs from this. In a forward sale, or salam, often the merchant buys wheat for the season, or oil for the season, or olives, and so on. When the season comes, he may lose, not just the profit, but sometimes even from his capital. You know this, whereas in an installment sale, the capital is guaranteed, the cash profit is guaranteed, and the installment profit is guaranteed. So this is completely different from a forward sale.
The questioner : Okay, Professor, regarding installment sales, I might lose, meaning...
The Shaykh : How might you lose?
The questioner : I mean, suppose I took the car for twenty thousand, and the market dropped... its price became...
The Shaykh : When you sold it, my brother...
The questioner : You haven't sold it yet.
The Shaykh : We are talking about installment sales, not about trade in general. Every trade has profit and loss, but in an installment sale, you have guaranteed three things: your capital, the cash profit, and the installment profit. A forward sale is not like that. — Someone else, please.
The questioner : You are saying that the car is sitting there and hasn't moved.
The Shaykh : This is a buy-back sale ('inah).
The questioner : But I bought it today in my name, I rode in the car, and I wanted to sell it on installment, and my profit was... is it forbidden?
The Shaykh : Installment sales are not permissible as long as you take an increase for the installment sale over the cash sale, do you understand?
The questioner : What about, for example, wheat or barley or something like that?
The Shaykh : This is a forward sale (salam), which is a different matter. A forward sale differs from this. In a forward sale, or salam, often the merchant buys wheat for the season, or oil for the season, or olives, and so on. When the season comes, he may lose, not just the profit, but sometimes even from his capital. You know this, whereas in an installment sale, the capital is guaranteed, the cash profit is guaranteed, and the installment profit is guaranteed. So this is completely different from a forward sale.
The questioner : Okay, Professor, regarding installment sales, I might lose, meaning...
The Shaykh : How might you lose?
The questioner : I mean, suppose I took the car for twenty thousand, and the market dropped... its price became...
The Shaykh : When you sold it, my brother...
The questioner : You haven't sold it yet.
The Shaykh : We are talking about installment sales, not about trade in general. Every trade has profit and loss, but in an installment sale, you have guaranteed three things: your capital, the cash profit, and the installment profit. A forward sale is not like that. — Someone else, please.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.