Ruling on buying a car for cash and selling it on credit with interest

Question:
A man came to me asking for a car on deferred payment. Before we agreed on the price, I went to the showroom and bought the car for cash. After buying the car, I determined its deferred price at an amount higher than the price I paid, and then I sold it to him. Is this form permissible, or does it contain some riba?

Answer:
There is no harm if you bought it, took possession of it, received it, had it registered in your name, and completed all the procedures. Then, if you sell it on credit for a known period with interest, there is no harm according to the correct view. This is called tawarruq, and people call it al-wa'dah. There is no harm in it according to the correct view. This is a form of permissible debt, provided that you take possession of it, it is in your ownership, it is registered in your name, the procedures are completed, and you move it to your house, or to the market, or to another location other than the seller's place. After this, you may dispose of it by selling it on credit for a known period, or by selling it for cash; both are the same. If you sell it on credit, there is no harm in interest, such as buying it for ten and selling it for twelve, thirteen, or fourteen, or buying it for twenty and selling it for thirty or twenty-five, for known periods. There is no harm in that, according to the correct opinion of the scholars.