Ruling on increasing the price of a commodity if it is deferred
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His Eminence the Shaykh: If I want to sell a car on installments and take an increase over its cash price, is this considered riba? And am I required to transfer it into my name, or not?
If the car is with you, and the buyer wants that specific car, or wants to make a profit from it, then there is no harm in this, as long as it is specified and the price is specified, even if you sell it for more than its cash value.Meaning: If it is worth fifty in cash and you sell it for sixty, there is no harm.
As for if the car is not with you,That this man came and said: I want such-and-such a car, go to the showroom and buy the car, and I will buy it from you later on installments, at a price higher than what you paid for it. This is not permissible, and this is forbidden; because it is a ruse to lend him with interest.
And as for if the car is with him and a person comes to buy it, not for the purpose of the car, nor for the purpose of making a profit from it, but for the purpose of the money, meaning: that he buys a car to sell it and buy a house, or to sell it and get married with the proceeds, or something similar to that. This is a matter called by the scholars the matter of tawarruq, and it is forbidden according to Shaykh al-Islam Ibn Taymiyyah and a group of scholars, and permissible according to others.
And what appears to me: If a person has a dire necessity for this and finds no way other than this to fulfill his need, then there is no harm in this.
The questioner: Am I required, for example, to transfer it into his name now if I take it—for example—Now, he came to me and said: I want the car from you, and the car is not with me now, but I, for example, buy the car; because it is not with the intention of giving it to you.
I buy it, for example, and then I agree with him.
The Shaykh: This is not valid; because he did not buy it except for him,If it were not for the fact that he came and said: I want such-and-such a car, he did not buy it,And as he says: I buy it, and if he wishes, he will lower the price; this is not acceptable, because this person who came and specified the car cannot lower the price. Then, if he lowers it, this lowering remains a black spot in your transaction.
His Eminence the Shaykh: If I want to sell a car on installments and take an increase over its cash price, is this considered riba? And am I required to transfer it into my name, or not?
If the car is with you, and the buyer wants that specific car, or wants to make a profit from it, then there is no harm in this, as long as it is specified and the price is specified, even if you sell it for more than its cash value.Meaning: If it is worth fifty in cash and you sell it for sixty, there is no harm.
As for if the car is not with you,That this man came and said: I want such-and-such a car, go to the showroom and buy the car, and I will buy it from you later on installments, at a price higher than what you paid for it. This is not permissible, and this is forbidden; because it is a ruse to lend him with interest.
And as for if the car is with him and a person comes to buy it, not for the purpose of the car, nor for the purpose of making a profit from it, but for the purpose of the money, meaning: that he buys a car to sell it and buy a house, or to sell it and get married with the proceeds, or something similar to that. This is a matter called by the scholars the matter of tawarruq, and it is forbidden according to Shaykh al-Islam Ibn Taymiyyah and a group of scholars, and permissible according to others.
And what appears to me: If a person has a dire necessity for this and finds no way other than this to fulfill his need, then there is no harm in this.
The questioner: Am I required, for example, to transfer it into his name now if I take it—for example—Now, he came to me and said: I want the car from you, and the car is not with me now, but I, for example, buy the car; because it is not with the intention of giving it to you.
I buy it, for example, and then I agree with him.
The Shaykh: This is not valid; because he did not buy it except for him,If it were not for the fact that he came and said: I want such-and-such a car, he did not buy it,And as he says: I buy it, and if he wishes, he will lower the price; this is not acceptable, because this person who came and specified the car cannot lower the price. Then, if he lowers it, this lowering remains a black spot in your transaction.