Purchasing car on Installment

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Purchasing car on Installment

Post by ala' on Thu May 14, 2009 12:34 pm

Bismillah-ir-Ra7man-ir-Ra7eem
as-salaat wa as-salam 3ala-nabiyyina Mu7ammad wa 3ala 'alihi wa sa7bihi ajma3een
as-salamu 3alaykom wa ra7mat ALLAH wa barakatuh

Nowadays cars are not a means of luxury anymore but rather a necessity, but some people cannot afford to buy a car at once so we address to banks for a loan (in sha' ALLAH islamic banks :-) )
so here's a question on Fatwa centre about buying a car on installment:

Quetion:
1. What is the Shariah ruling on purchasing items (such as car) by installment? Can this type of transaction be considered as usury (Riba)?2. What conditions should a Muslim meet before taking a loan?



Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

1. Purchasing goods on instalments is permissible, in a way that the remaining price or instalments are considered a debt which the purchaser is obliged to repay. For instance, a seller informs a buyer that the price of a car is so and so on instalments and the amount of monthly instalments is so and so. This contract is permissible as it is confirmed that Bareerah purchased herself [freed herself from slavery, as she was a slave] with nine Awqiya - in nine years. The Prophet confirmed this.

2. The conditions which a Muslim should observe before borrowing are as follows: (a) He should be in a dire necessity for borrowing and he should not take debt as an easy matter because it is a source of anxiety and humiliation. (b) He should intend to return this debt so that Allaah would help him to do so. The Prophet said: "Whoever takes people's money while wanting to repay, Allaah would help him to repay, and whoever takes people's money while wanting to spoil them, then Allaah will spoil him (i.e. spoil his wealth and punish him in the Hereafter)." [Al-Bukhaari].

It is desirable to write the details of the debt in the presence of some witnesses so that the rights will be preserved. Allaah Says (what means): {O you who believe! When you contract a debt for a fixed period, write it down. Let a scribe write it down in justice between you}. [Quran 2] Finally, we ask Allaah to enable you to do that which is good and guide us all to perform good deeds.

Allaah knows best.



La ilaha illa ALLAH, pay attention to the hadeeth mention regarding taking a debt !!! :-) isn't it beautiful? :-)

may ALLAH (Sub7anahu wa Ta3ala) guide us all, ameen!!![/size]

ref.: http://www.islamweb.net.qa/ver2/Fatwa/ShowFatwa.php?lang=E&Id=81409&Option=FatwaId
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