What is the ruling on buying a car on installment (the issue of tawarruq)?
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The questioner : A group of people buy cars to sell them on installment.
The Shaykh : Yes?
The questioner : Some of them now have started to partner up, three or four of them, and buy a car in order to sell it on installment; they buy it and then sell it on installment?
The Shaykh : There is nothing wrong with it, provided that it is not an issue of tawarruq. For example, now—pay attention—if you buy a car on installment, it has three aspects:
The first aspect is that I buy it on installment to use it, whether for hire or for my own needs. This is permissible, and there is no disagreement about it.
Second, I buy it to make a profit from it, not to meet my own need. I am not in need of it, but I bought it in this country to sell it in another country for a profit. This is also fine.
The third scenario is that I bought it because I needed money, but I could not find anyone to lend it to me, so I resorted to this method. The scholars call this the issue of tawarruq, and it involves the disagreement that I mentioned to you. Yes.
The Shaykh : Yes?
The questioner : Some of them now have started to partner up, three or four of them, and buy a car in order to sell it on installment; they buy it and then sell it on installment?
The Shaykh : There is nothing wrong with it, provided that it is not an issue of tawarruq. For example, now—pay attention—if you buy a car on installment, it has three aspects:
The first aspect is that I buy it on installment to use it, whether for hire or for my own needs. This is permissible, and there is no disagreement about it.
Second, I buy it to make a profit from it, not to meet my own need. I am not in need of it, but I bought it in this country to sell it in another country for a profit. This is also fine.
The third scenario is that I bought it because I needed money, but I could not find anyone to lend it to me, so I resorted to this method. The scholars call this the issue of tawarruq, and it involves the disagreement that I mentioned to you. Yes.