Is it permissible for a man to sell his car on installment for a price higher than its cash value? And am I required to take it in my name?
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The questioner : Your Eminence, if I want to sell the car on installment and take an increase over its value.
The Shaykh : And you took?
The questioner : And you took an increase over its value.
The Shaykh : A certificate?
The questioner : An addition.
The Shaykh : An increase, yes.
The questioner : And you took an increase over its cash amount, is this considered riba (usury or interest), and am I required to transfer it to my name or not?
The Shaykh : 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 it, as long as it is specified and the price is specified, even if you sell it for more than its current value. For example, if it is currently worth fifty and you sell it for sixty, there is no harm. However, if the car is not with him, and this man comes and says, "I want such-and-such car," and he says, "Go to the showroom and buy the car, and I will sell it to you afterwards on installment for more than its value," then this is forbidden (haram) and not permissible, because it is a ruse to lend him money with interest.
As for when the car is in his possession and a person comes to buy it, not for the purpose of the car itself, nor for the purpose of making a living from it, but for the purpose of the money—meaning that he buys the car to sell it and buy a house, or to sell it and get married, or something similar—this is called by the scholars the issue of tawarruq. According to Shaykh al-Islam Ibn Taymiyyah and a group of scholars, it is forbidden, while according to others, it is permissible. What appears to me is that if a person has a dire necessity for this and finds no other way to fulfill his need, there is nothing wrong with it.
The questioner : Okay, is it required, for example, that I transfer it to my name? For example, if he comes to me and says, "I want a car from you," and he takes it from me, but the car is not currently with me, but for example, I say to him: "I will buy, for example, the car, not with the intention of giving it to you, but I buy it, for example, I want its price?"
The Shaykh : This is not valid, because he did not buy it except for him; had he not come and said, "I want such-and-such car," he would not have bought it. And the fact that he says, "I am buying it, and if I wish, I will withdraw," is not a valid possibility, because this person who came and specified the car cannot withdraw. Then, if he withdraws, this withdrawal remains a black spot in his transaction.
The Shaykh : And you took?
The questioner : And you took an increase over its value.
The Shaykh : A certificate?
The questioner : An addition.
The Shaykh : An increase, yes.
The questioner : And you took an increase over its cash amount, is this considered riba (usury or interest), and am I required to transfer it to my name or not?
The Shaykh : 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 it, as long as it is specified and the price is specified, even if you sell it for more than its current value. For example, if it is currently worth fifty and you sell it for sixty, there is no harm. However, if the car is not with him, and this man comes and says, "I want such-and-such car," and he says, "Go to the showroom and buy the car, and I will sell it to you afterwards on installment for more than its value," then this is forbidden (haram) and not permissible, because it is a ruse to lend him money with interest.
As for when the car is in his possession and a person comes to buy it, not for the purpose of the car itself, nor for the purpose of making a living from it, but for the purpose of the money—meaning that he buys the car to sell it and buy a house, or to sell it and get married, or something similar—this is called by the scholars the issue of tawarruq. According to Shaykh al-Islam Ibn Taymiyyah and a group of scholars, it is forbidden, while according to others, it is permissible. What appears to me is that if a person has a dire necessity for this and finds no other way to fulfill his need, there is nothing wrong with it.
The questioner : Okay, is it required, for example, that I transfer it to my name? For example, if he comes to me and says, "I want a car from you," and he takes it from me, but the car is not currently with me, but for example, I say to him: "I will buy, for example, the car, not with the intention of giving it to you, but I buy it, for example, I want its price?"
The Shaykh : This is not valid, because he did not buy it except for him; had he not come and said, "I want such-and-such car," he would not have bought it. And the fact that he says, "I am buying it, and if I wish, I will withdraw," is not a valid possibility, because this person who came and specified the car cannot withdraw. Then, if he withdraws, this withdrawal remains a black spot in his transaction.