The Rules of the Tawarruq Issue

Question:
A man wants to borrow a sum of ten thousand riyals from a person, on the condition that he repays it in thirteen installments, and that he goes with him to buy a car for the same amount of ten thousand, and the owner of the money sells it to him, and he sells it to him afterwards as he wishes?

Answer:
This requires a detailed explanation. As for taking ten thousand and making it thirteen thousand in installments as a loan, this is the very essence of riba (usury or interest), even if it is not from a bank. This is the very essence of riba, whether the riba is from a bank, or from a vagabond, or from anyone else; this is the very essence of riba.
As for buying the car, that is a different matter. Buying a car has its own details. If he sells him a car from the merchants without taking possession of it, this is not permissible, and it is selling what one does not have. The Prophet (peace and blessings be upon him) forbade a person from selling what he does not have, and he said to Hakim (may Allah be pleased with him) : .
However, if he buys the car, takes possession of it, and it becomes in his possession in his house, or in his courtyard, or in the market, and then he sells it to him after he has taken full possession of it, selling it to him for a known term, then there is nothing wrong with this. This is called tawarruq if the buyer did not buy it for use, but bought it to sell it; to take its price; to help with a marriage, or to pay off a debt, or to renovate the house, or something similar. It is called the issue of al-warq (paper). The common people call it al-wa'd (the promise). There is disagreement among the scholars regarding it.
But the correct view is that it is permissible on the condition that the seller has sold what he owns, has taken possession of it, and it is with him. He did not sell what is with the merchants, selling something that is with them. The Prophet (peace and blessings be upon him) forbade selling goods where they are bought, until the merchants take them to their dwellings, and he said: .
So the one who deals in the issue of tawarruq must not sell anything to people while it is still with them. Rather, he must have owned it, bought it, taken possession of it, and received it, and then sell it afterwards. And the one who buys it does not sell it in the place where he bought it. He also takes possession of it in his house, or in his shop, and after that he looks into the sale. He does not sell it to the one from whom he bought it. Each one takes possession, yes.