I bought a car for twenty thousand cash and financed it for thirty thousand over one year. Is this considered forbidden or permissible? We ask for guidance on this.
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The questioner : This listener, Ali Ahmad al-Zahrani from al-Bahah in the land of Zahr, says in this question: I bought a car for twenty thousand cash and financed it for thirty thousand over one year. Is this considered forbidden or permissible? We ask for guidance on this?
The Shaykh : The answer to this question is from two angles.
The questioner : Yes.
The Shaykh : The first angle is the form of the contract. Did the one who bought the car for twenty thousand and then sold it for thirty have the car in his possession before the borrower asked for it? Did he buy it and keep it in his possession, and then this man came to buy it for a period of one year, so he sold it to him for thirty? Or did he only buy it for twenty after the borrower asked him to buy it for him? If it is the first scenario, meaning the car was already with him and then this man came to buy it from him with this profit, then we look at this issue from the second angle, which is whether this large excess profit is permissible or not permissible? What appears to me from the generality of the evidence, such as the saying of Allah the Exalted:[Al-Baqarah 2:275] and the saying of Allah the Exalted: [Al-Baqarah 2:267], and Allah did not specify the earnings. What appears to me is that it is permissible as long as the buyer is an adult, sane, and of sound mind, because he is not forced to accept this price, and because the owner is free to sell for whatever he wants. However, a person should have mercy on the servants of Allah (Glorified and Exalted is He), for the merciful are shown mercy by the Most Merciful. If he knows that this buyer only bought it out of dire necessity and pressing need, let him be lenient with him and not take from him except a small profit, so that he falls under the saying of the Prophet (peace and blessings be upon him): Sunan Ibn Majah 2417Sahih (Darussalam).
As for if it is the second scenario, where the borrower came to this merchant.
The questioner : Yes.
The Shaykh : And said, "I want you to buy me a car and I will profit you so much and so much," so he went and bought it for him from the showroom and then sold it to him while it was still in the showroom, then this is not permissible, because its reality is that this merchant financed this poor man by lending him the price of this car with profit and increase. And it is known that if a loan brings benefit, it is riba (usury or interest). And on this basis, this scenario is not permissible.
And here we take a rule and formulate it, which is that if the merchant buys the car or the commodity in order to fulfill the borrower's request to sell it to him for more, then this is riba (usury or interest) and is not permissible. But if the commodity is already with the merchant, and the man comes and buys it for more than its cash price because he bought it on installment, then there is nothing wrong with it, due to its falling under the generality of the saying of Allah the Exalted:[Al-Baqarah 2:275].
The Shaykh : The answer to this question is from two angles.
The questioner : Yes.
The Shaykh : The first angle is the form of the contract. Did the one who bought the car for twenty thousand and then sold it for thirty have the car in his possession before the borrower asked for it? Did he buy it and keep it in his possession, and then this man came to buy it for a period of one year, so he sold it to him for thirty? Or did he only buy it for twenty after the borrower asked him to buy it for him? If it is the first scenario, meaning the car was already with him and then this man came to buy it from him with this profit, then we look at this issue from the second angle, which is whether this large excess profit is permissible or not permissible? What appears to me from the generality of the evidence, such as the saying of Allah the Exalted:
But Allah has permitted trade and has forbidden interest
وأحل الله البيع وحرم الرباO you who have believed, spend from the good things which you have earned
يا أيها الذين ءامنوا أنفقوا من طيبات ما كسبتمWhoever is easy with (a debtor) who is in difficulty, Allah will be easy with him in this world and in the Hereafter.
من يسّر على معسر يسّر الله عليه في الدنيا والأخرةAs for if it is the second scenario, where the borrower came to this merchant.
The questioner : Yes.
The Shaykh : And said, "I want you to buy me a car and I will profit you so much and so much," so he went and bought it for him from the showroom and then sold it to him while it was still in the showroom, then this is not permissible, because its reality is that this merchant financed this poor man by lending him the price of this car with profit and increase. And it is known that if a loan brings benefit, it is riba (usury or interest). And on this basis, this scenario is not permissible.
And here we take a rule and formulate it, which is that if the merchant buys the car or the commodity in order to fulfill the borrower's request to sell it to him for more, then this is riba (usury or interest) and is not permissible. But if the commodity is already with the merchant, and the man comes and buys it for more than its cash price because he bought it on installment, then there is nothing wrong with it, due to its falling under the generality of the saying of Allah the Exalted: