Is purchasing a car from an Islamic bank in this manner halal or haram?

For the bank's sale of the car to be valid, it must occur after the bank has acquired ownership and possession of it. It is not permissible for the bank to sell the car while it is still at the original seller's premises, due to the Prophet's (peace and blessings be upon him) saying: "If you buy a commodity, do not sell it until you take possession of it." There is no harm in bringing the seller to the bank, conducting the sale, and placing the car in front of it. In the street and public market, it is permissible for someone who has bought a commodity to sell it to another while it is still in its place.

There is no harm if the original seller transfers the car's registration directly to the buyer without first transferring it to the bank, in order to save expenses, as registration is an additional matter to the sale. If the car has a defect or similar issue, the buyer should refer to the bank that sold it, not to the seller who transferred the registration to him. Reliance should be placed on the contract that proves the seller is the bank.