Is installment sale permissible?
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Question:
From the length of the session, this is a letter sent by the listener Sa'id Muhammad al-Zahrani. Our brother says: I sold a car to one of my friends for forty thousand riyals, on the condition that the value be paid in monthly installments of one thousand riyals each. This friend is going through a financial crisis, so he asked me to sell it at the showroom, since the car is still in my name. I took a promissory note for the price and stipulated to my friend that he be present with me at the time of sale so that he could receive the price and the sale would be with his consent. He agreed, and the car was sold at the showroom for twenty-seven thousand riyals. He then received the price of the car, with which he paid off some of his debts. I had no money to lend him, and I had nothing but the car he bought from me, as I mentioned before, to the extent that I had no desire to sell it. Is there any riba in this transaction of mine? And is installment sale permissible? Knowing that my car cost me thirty-five thousand riyals? Please give us a ruling, may Allah reward you with good.
Answer:
There is no harm in installment sale if the installments are known and the terms are known, due to the generality of His saying, (peace and blessings be upon him): [al-Baqarah:282]. Allah has permitted lending to a specified term. So if the installments are clear and known, and the terms are known, there is no harm, as you did with your partner. One thousand every month is a known thing, and the total is known, forty thousand. There is nothing wrong with this, if you sold the car while it was in your ownership and under your possession and control, there is no harm in that. Yes.
The presenter: May Allah reward you with good. About his selling his brother's car?
The Shaykh: As for your taking charge of selling it, it does not harm you. You are doing a good deed in this, and this is from the category of agency. You are doing a good deed and will be rewarded as long as you did it for the sake of Allah. Yes.
The presenter: May Allah reward you with good.
From the length of the session, this is a letter sent by the listener Sa'id Muhammad al-Zahrani. Our brother says: I sold a car to one of my friends for forty thousand riyals, on the condition that the value be paid in monthly installments of one thousand riyals each. This friend is going through a financial crisis, so he asked me to sell it at the showroom, since the car is still in my name. I took a promissory note for the price and stipulated to my friend that he be present with me at the time of sale so that he could receive the price and the sale would be with his consent. He agreed, and the car was sold at the showroom for twenty-seven thousand riyals. He then received the price of the car, with which he paid off some of his debts. I had no money to lend him, and I had nothing but the car he bought from me, as I mentioned before, to the extent that I had no desire to sell it. Is there any riba in this transaction of mine? And is installment sale permissible? Knowing that my car cost me thirty-five thousand riyals? Please give us a ruling, may Allah reward you with good.
Answer:
There is no harm in installment sale if the installments are known and the terms are known, due to the generality of His saying, (peace and blessings be upon him):
O you who have believed, when you contract a debt for a specified term, write it down.
يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنتُمْ بِدَيْنٍ إِلَى أَجَلٍ مُسَمًّى فَاكْتُبُوهُThe presenter: May Allah reward you with good. About his selling his brother's car?
The Shaykh: As for your taking charge of selling it, it does not harm you. You are doing a good deed in this, and this is from the category of agency. You are doing a good deed and will be rewarded as long as you did it for the sake of Allah. Yes.
The presenter: May Allah reward you with good.
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.