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The question

Is it permissible to buy a car in installments from a bank that first buys it from a showroom and then sells it to the customer with a 4% profit over 60 months, knowing that the contract between the customer and the bank is signed before the bank pays the value of the car to the showroom, and there is a penalty on the customer in case of延迟 in paying the installments?

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Source: FtawySummary from Ftawy's records · added here Sep 2, 20261 min readAlso available in العربية
The answer

The transaction includes an impermissible usurious condition, which is the late payment penalty. This is the forbidden usury of Jahiliyyah (pre-Islamic era). Signing the contract with the bank is permissible if it is after the car has entered into the bank's possession and guarantee. Otherwise, it is selling what one does not own, which is prohibited. To ensure the buyer's seriousness, it is sufficient to take a down payment without signing a contract for the purchase of the commodity before it enters into the bank's ownership.

Summary from Ftawy's records · added here

Reviewed by El Fatwa's sharia committee.

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Where this answer came from
Source platform
Ftawy
Original fatwa ID
110242
Added here
. This is when the answer was added to El Fatwa, not the fatwa's date.
Text
Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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Read the full answer on Ftawy