What is the ruling on purchasing goods for the sake of their price and paying for them in installments?
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The questioner : Praise be to Allah.
The honorable Shaykh, one of the brothers is with us asking. He says: I have an office for installment sales services, and it has a warehouse. The merchant buys the goods and offers them for sale on installment only. The office sells them to him and takes a fee for the contract and the payment of the installments. The buyer takes the goods and sells them elsewhere. What is the ruling on this transaction?
The Shaykh : Now we understand that we have a merchant who bought cars.
The questioner : Or goods.
The Shaykh : Be patient, man. Cars and goods are the same. He bought cars and deposited them with him, and he sells them on installment. He has a broker who sells them to him and settles the price from the buyer to here. This is permissible; there is no problem with it. What remains is this one who bought them. You say he sold them in order to get the money. Is that how you asked?
The questioner : ...
The Shaykh : Fine, I understand... The important thing is the question you asked. This man who bought the goods for the sake of their price is what the scholars call tawarruq. Some of them permitted it, and some of them prohibited it. Do you understand? Those who prohibited it said that this is a ruse, because he did not buy the car, for example, wanting the car, but wanting the money. The others say this is not our concern; he bought the car, and his intention is not our concern. Whether he wants to sell it, or keep it for himself, or keep it for rent, or take it to another country where it is worth more, it is not our concern. So there is scholarly disagreement in this matter. Whoever wants to be scrupulous should leave it, and whoever wants to be lenient should follow the other scholars. Yes, but the prohibited, forbidden thing that is similar to the practice of the Jews—these people to whom someone who wants a car comes and says, "Go to the showroom and choose the car you want, and I will buy it from the showroom and pay them the price, and I will sell it to you on installment for more"—this is undoubtedly forbidden. Do not be deceived by a fatwa from someone who says it is lawful, for Allah is not unaware of anything on earth or in the heavens. What is the difference between the merchant giving you money and saying, "Take this, it is the value of the car," but this money is deferred to you for more? This is forbidden, there is no problem with it. What is the difference between this and the first form, except that the first form is a ruse and this one is explicit? And the ruse is more sinful than the explicit one, because as Ayub al-Sakhtiyani (may Allah have mercy on him) said: "They deceive Allah as they deceive children. If they had done the matter in its proper way, it would have been easier." Yes.
The honorable Shaykh, one of the brothers is with us asking. He says: I have an office for installment sales services, and it has a warehouse. The merchant buys the goods and offers them for sale on installment only. The office sells them to him and takes a fee for the contract and the payment of the installments. The buyer takes the goods and sells them elsewhere. What is the ruling on this transaction?
The Shaykh : Now we understand that we have a merchant who bought cars.
The questioner : Or goods.
The Shaykh : Be patient, man. Cars and goods are the same. He bought cars and deposited them with him, and he sells them on installment. He has a broker who sells them to him and settles the price from the buyer to here. This is permissible; there is no problem with it. What remains is this one who bought them. You say he sold them in order to get the money. Is that how you asked?
The questioner : ...
The Shaykh : Fine, I understand... The important thing is the question you asked. This man who bought the goods for the sake of their price is what the scholars call tawarruq. Some of them permitted it, and some of them prohibited it. Do you understand? Those who prohibited it said that this is a ruse, because he did not buy the car, for example, wanting the car, but wanting the money. The others say this is not our concern; he bought the car, and his intention is not our concern. Whether he wants to sell it, or keep it for himself, or keep it for rent, or take it to another country where it is worth more, it is not our concern. So there is scholarly disagreement in this matter. Whoever wants to be scrupulous should leave it, and whoever wants to be lenient should follow the other scholars. Yes, but the prohibited, forbidden thing that is similar to the practice of the Jews—these people to whom someone who wants a car comes and says, "Go to the showroom and choose the car you want, and I will buy it from the showroom and pay them the price, and I will sell it to you on installment for more"—this is undoubtedly forbidden. Do not be deceived by a fatwa from someone who says it is lawful, for Allah is not unaware of anything on earth or in the heavens. What is the difference between the merchant giving you money and saying, "Take this, it is the value of the car," but this money is deferred to you for more? This is forbidden, there is no problem with it. What is the difference between this and the first form, except that the first form is a ruse and this one is explicit? And the ruse is more sinful than the explicit one, because as Ayub al-Sakhtiyani (may Allah have mercy on him) said: "They deceive Allah as they deceive children. If they had done the matter in its proper way, it would have been easier." Yes.