The Permissibility of Installment Sales

Question:
Your Eminence, this questioner is from the United Arab Emirates, Al-Ain, and he has coded his name as (A. M. S). He says in this question:
My brother bought a car, and they told him: if you pay the amount in one lump sum, we will lower its price, and if you pay the amount in installments, a specific amount each month, we will increase its price. So from here I ask you, Your Eminence: Is it permissible for my brother to buy the car in installments with interest? And is that considered usury or interest?

Answer:
If they agree on this or that, there is nothing wrong with it. If they agree on cash, there is nothing wrong with it. And if they agree on known installments, there is nothing wrong with it, a specific amount each month; because of the saying of Allah the Exalted: [al-Baqarah:282]. This covers installments and a single installment. If they agree on a known amount each month, or a known amount each year, there is nothing wrong with it. And if they agree on cash and part ways having agreed on a known amount, there is nothing wrong with it. As for parting ways without having agreed on anything, neither this nor that, it is not valid. They must be decisive about cash, or about deferral, before they part ways.

The presenter: May Allah preserve you, Your Eminence. Perhaps you could elaborate on sales in our current time, what is forbidden among them and what is permissible; because they have become confusing for many people, Your Eminence.

The Shaykh: Allah the Exalted says: [al-Baqarah:275]. Sale is lawful if it is free from ignorance, with a known price, and the item sold is known, or with a known term, there is nothing wrong with it. But if the term is unknown, or the price is unknown, or the item sold is unknown, it is not valid. The item sold must be known, and the price must be known, either in cash, or deferred with a known term. Yes.

The presenter: May Allah reward you.