To what extent is the car installment system legitimate under the Murabaha financing arrangement from an Islamic bank, where the customer chooses the car and provides its price offer, then the bank pays its price to the dealership, and the customer directly receives it in their name, with it being mortgaged for the installments and not permissible to dispose of it except by consulting the bank, along with the fixed interest rate?
The mentioned transaction is nothing but an usurious loan, unless the bank genuinely owns the car before selling it to you, such that it enters into its guarantee. The fact that the interest does not increase with late payment does not change the ruling in any way.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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