Is it permissible to buy a car in installments from an agency that charges compound interest on the remaining amount after the down payment, whereby the interest rate is determined based on the number of installment years, knowing that the agency buys the car before selling it in installments?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
If the seller owns the car before selling it to you in installments, there is no harm in that, even if the deferred price is higher than the spot price, for deferment has a share in the price. Similarly, there is no harm in stipulating an upfront installment payment. The determination of the profit margin based on the installment period and the amount paid in advance does not affect the contract if a specific, known price is agreed upon at the time of the contract.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/121105
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 121105
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy