What is the ruling on the following questions concerning lease-to-own contracts (ijarah muntahiyah bi al-tamleek): 1. What is the ruling on demanding the lessee pay 500 riyals to the insurance company for repairing the car insured by the lessor when an accident occurs? 2. What is the ruling on increasing the final payment amount from 20,000 riyals to 30,000 riyals when it is to be paid in installments over an additional year? 3. What is the ruling on demanding a sum of money from the lessee when returning the car before the end of the contract period, along with waiving the down payment? 4. What is the ruling on some companies demanding 10% of the value of spare parts, and 1500 riyals when wishing to repair the car at the dealership, or 750 riyals when wishing to repair it at another workshop other than the dealership, upon the occurrence of an accident? And do these prohibited conditions invalidate the contract and render it void, or does the contract not become فسد (corrupted) or void thereby?
Leasing leading to ownership is impermissible except under certain conditions and regulations. The hand of the lessee is a hand of trust (amanah); he is not liable for damage that occurs without his negligence. Among the conditions for permissibility is that insurance must only be cooperative. Furthermore, stipulating an increase in case of late payment is void and constitutes blatant usury (riba). As for stipulating the payment of an amount upon returning the car before the end of the term, scholars have differed regarding its permissibility. If the contract contains invalid conditions, it is not permissible to enter into it, and if it is concluded, it is invalid according to the majority of scholars.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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