Question Summary:
Is purchasing a vehicle through the bank haraam because of the interest or because of the insurance?

Question Detail:

I live in Durban, and I would like to know if there is any other persmissible finance for vehicle's beside's from Islamic banks, such as Albaraka Bank? I see that there are adverts from FNB and ABSA about Islamic finance, is the way that these finance options are setup permissible for Muslims to use?
I have been told that these Banks only get ulama who "agree" to their terms and conditions on their board.
Is purchasing a vehicle through the bank haraam because of the interest or because of the insurance? I have also been told that some fathwaa's have been passed nowdays with regards to insurance, i.e: that 3rd party insurance is pemissible.
Please advise on this entire matter and if there are any possible ways of purchasing a vehicle without having all the money, like through a bank (i am looking at a new vehicle), because in a nut shell, for mine and my wife's working conditions we require a second vehicle and i told her that if it is not permissible to buy through the bank(non-islamic), then we will have to save and buy a second hand vehicle, because i cannot afford the albaraka bank repayments.

Answer :

In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatoh
At the outset, we wish to clarify that we do not approve the finance products of Albaraka Bank. We have checked some finance deals of Albaraka Bank and found them to be non Shariah compliant. We have only approved the Ijaarah (hiring) vehicle finance product of Wesbank, a division of FNB.
 
It is not permissible to finance through conventional banks as their deals contains elements of interest and gambling which are expressly prohibited in the Quraan. It is not permissible to subscribe for third party insurance as it contains elements of interest and gambling as well.
 
Allah is our Creator and Master, we are His slaves. As slaves we are bound to express submission, subjugation to the commands of our Master-Allah. Our allegiance must be to the command of Allah and not amassing the pleasures of this world. If we express our true submission to the will and command of Allah, we will be His true slaves and sincere bondsman. Otherwise, we have failed in our duty in serving Allah. Allah has prohibited us from interest. It is our duty as His slaves to abstain from it whatever the circumstances maybe. The rule of Allah is supreme and nothing may over rule it. Therefore, if your budget does not allow to purchase a new car except that you get involved in interest, then purchase a good reliable second hand car that will serve your purpose and suite your budget without becoming tainted with Haraam. In this way Allah will fill your earnings with true Barakat (blessings) and grant you contentment and peace of mind.
 
Every Alim is a custodian of Shariah and a heir of Rasulullah (صلى الله عليه وسلم). Allah has chosen the Ulama to protect His Deen and guide the masses towards the straight path. It is incorrect for us to judge the intentions and sincerity of the Ulama that serve on the Boards of these Finance houses. Their intentions and sincerity is to be judged by Allah Alone. We do not have a right to question the intention and sincerity of these Ulama.
And Allah knows best
Wassalam
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In'aamiyyah