Question Summary:
Buying in installments

Question Detail:

 
First I would like to thank and appreciate your efforts on the work .Sir,I live in Saudi Arabia and I am confused in buying a car.I do not have sufficient amount to buy car on cash,can i buy on installments.If so and if you know any companies or islamic banks here ,please guide me.I am in a state of confusion since 3 years as my father said its not correct to buy on installments.

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
It is permissible to buy a car on installments as long as the actual price of the car is known and the terms of payments is mutually agreed[1]. If there is a delay in payments, the seller cannot charge a penalty for the late payment as that will be interest. We assume the banks in Saudi Arabia are Islamic and offer Shari’ah Compliant Finances. You may contact the banks and forward us their contracts for our observations.
 
And Allah Ta’āla Knows Best
Immad Bin Arshad
Student Darul Iftaa
California, USA
Checked and Approved by,
Mufti Ebrahim Desai.
www.daruliftaa.net