Ruling on buying a car on installment at a price higher than its value
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Your Eminence! What is the ruling on taking a car from the National Bank on installment, knowing that the bank does not own it, but pays its value and buys it from the company, then sells it to the customer on high installments with easy terms? This is because he is in dire need of installments. Does the ruling of riba apply to this?
Yes.
This installment arrangement is forbidden,For example: A person comes to the bank or a non-bank entity and says: I need a car with such and such specifications. They say: Go to the showroom and choose the car you want.Then he comes and says: I want such and such a car.So the merchant or the bank goes to the showroom and says: Sell me this car. So the bank buys it from him for cash for fifty thousand, then sells it to the first person who requested it on installment for sixty thousand. This is forbidden and not permissible. It is a clear stratagem to circumvent riba; because this bank that bought it for him and then sold it to him is as if it lent him its value with an increase, and this is forbidden. The contract here is nominal. If it were not for the request for the car, the bank would not have bought it. Therefore, one must be cautious of this. Even if some people issue a fatwa permitting it, they have not reflected on the issue. If they had reflected on it, they would have found it a clear deception. It is more wicked than the deception of the Jews, who, when Allah forbade them fat, melted it so it became oil, then sold it and ate its price. So the Prophet (peace and blessings be upon him) invoked upon them that Allah the Exalted and Majestic would fight them. This stratagem I mentioned is closer to being forbidden than the stratagem the Jews practiced.
So the believer should fear Allah the Exalted and Majestic,And when he said: I have not found anyone,He says: Praise be to Allah, you have your clothes and you have a dwelling, whether by rent or by ownership. And this is sufficient. You have from this world only what you eat and consume, or what you wear and wear out, or what you give in charity and spend. If you remain such that you do not eat except once a day and do not buy the car in this manner.
And with this, this meeting ends; and until a future session, if Allah wills.
Yes.
This installment arrangement is forbidden,For example: A person comes to the bank or a non-bank entity and says: I need a car with such and such specifications. They say: Go to the showroom and choose the car you want.Then he comes and says: I want such and such a car.So the merchant or the bank goes to the showroom and says: Sell me this car. So the bank buys it from him for cash for fifty thousand, then sells it to the first person who requested it on installment for sixty thousand. This is forbidden and not permissible. It is a clear stratagem to circumvent riba; because this bank that bought it for him and then sold it to him is as if it lent him its value with an increase, and this is forbidden. The contract here is nominal. If it were not for the request for the car, the bank would not have bought it. Therefore, one must be cautious of this. Even if some people issue a fatwa permitting it, they have not reflected on the issue. If they had reflected on it, they would have found it a clear deception. It is more wicked than the deception of the Jews, who, when Allah forbade them fat, melted it so it became oil, then sold it and ate its price. So the Prophet (peace and blessings be upon him) invoked upon them that Allah the Exalted and Majestic would fight them. This stratagem I mentioned is closer to being forbidden than the stratagem the Jews practiced.
So the believer should fear Allah the Exalted and Majestic,And when he said: I have not found anyone,He says: Praise be to Allah, you have your clothes and you have a dwelling, whether by rent or by ownership. And this is sufficient. You have from this world only what you eat and consume, or what you wear and wear out, or what you give in charity and spend. If you remain such that you do not eat except once a day and do not buy the car in this manner.
And with this, this meeting ends; and until a future session, if Allah wills.