Is it permissible to purchase a car from the bank in installments with a 40% interest rate over five years, knowing that the bank buys it from a dealer and the institution agrees with the bank to transfer ownership to the employee?

If the bank first purchases the car from the dealer and then sells it to employees in installments at a specific price without interest or late payment penalties, there is no harm in that. This is called Murabaha to the one who commands the purchase and is not an interest-based loan.