What is the ruling on selling by installments with an increase in price due to the installments, provided that a down payment is made and the commodity is purchased by the seller after agreement with the client?

Taking a down payment from the buyer means that the sale has been concluded and has become binding. It is not permissible for a Muslim to sell what he does not possess, according to the hadith of Hakim ibn Hizam: "Do not sell what you do not possess."

However, if the agreement is merely a promise to buy and sell without being binding, then it is permissible for the seller to purchase the commodity and then sell it to the buyer after taking possession of it.

Sheikh Ibn Baz was asked about selling a car in installments before possessing it, and he replied that it is not permissible due to the saying of the Prophet, peace be upon him: "Do not sell what you do not possess" and "It is not permissible to combine a loan and a sale, nor to sell what you do not possess." As for a promise to buy, there is no harm in it if the purchase and possession are completed, and then the seller sells it to the buyer.

Sheikh Ibn Uthaymeen was asked about the seller going to acquire the commodity from another place after agreeing with the buyer, and he replied: If they have contracted, then this is not permissible. However, if they have merely promised each other, there is no harm as long as the contract is not finalized before the commodity is present.

As for paying the remaining amount in monthly installments with interest: If what is meant is that the monthly installment increases with interest upon delay, then this is forbidden and usury (riba). If what is meant is that the price of the commodity in installments is greater than its cash price, then this is permissible if both parties agree on the price and settle on it at the time of the contract. It is disliked to calculate the increase as a usurious calculation; rather, the seller should inform the buyer of the total installment price.