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What is the ruling on purchasing a car from an Islamic bank in Germany that buys it then sells it in installments, with a fixed profit margin determined beforehand, and this margin decreases as the repayment period increases?

1 min readAlso available in العربية

If the bank owns the commodity and takes possession of it, then sells it in installments at a known price, this is permissible. An increase in price for installment payments by a certain percentage, varying with the duration, is not problematic, as long as the sale is concluded at a known price and the bank does not stipulate a late payment penalty.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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