Is it permissible to sell cars in cash to a showroom that deals with a company that finances buyers with interest, knowing that the company pays the full amount to the showroom and receives installments from the buyer, and does the showroom incur sin by doing so?
It is not permissible to deal with the aforementioned installment company, as doing so would be assisting it in usury (riba), which is forbidden. The company's act of paying the price of the car in cash to the dealership and recovering it from the customer in installments with an increase is a forbidden usurious loan. Employing this company, supplying it with information, or directing customers to it are all forms of forbidden assistance. The permissible way is for the company to buy the car from the dealership in cash, then take possession of it, and then sell it to the customer at an installment price. This is what has been affirmed by the fatwas of the Permanent Committee, which state that it is not permissible to engage in the aforementioned transaction because it is a loan with a stipulated increase, which is a stratagem for forbidden usurious transactions. Furthermore, the bank sells what it does not own, based on the saying of the Prophet (peace be upon him): "Do not sell what you do not have." If the customer takes out a usurious loan and buys from the dealership, there is no blame on the dealership, and the sin is solely upon the customer.
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