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A person purchases a car and sells it to another person in installments

Fatwa no. 21669 All praise be to Allah Alone, and peace and blessings be upon the Last of the Prophets. To proceed:The Permanent Committee for Scholarly Research and Ifta' reviewed the letter no. (4869) dated 5/8/1421 A.H. That His Eminence, the Grand Mufty, received from an inquirer who is the owner of car agency. The letter was sent by the General Manager of the Ministry of Islamic Affairs, Tabuk branch, to the Committee from the Secretariat General of the Council of Senior Scholars. The inquirer's question includes the following:I own an auto dealership at Tabuk. In this letter, I intend to clarify the facts regarding buying and selling new cars such as HiLux cars and pickup trucks. The buyer comes to our dealership and purchases a car for an agreed price based on a certain method of payment; whether it is monthly installments or during a specific period. However, before the sale we stipulate that he is not to resell it to any other dealership and he agrees. Upon the sale, we specify a price (Part No. 11; Page No. 68) and not more. For instance, in other dealerships or the auto market, the HiLux is sold for 38,000 Saudi riyals whereas in our dealership we pay SR 36,000 for it. If he [i.e. The person who wants to sell the car after buying it] becomes angry over the low price, we say, "If you do not like the price or do not want to conclude the transaction, we can tear up the papers." And he would then, due to his need for money, agree to sell for the price we offer him. In the case where the buyer says that he will transfer the ownership of the car to his name, the dealership refuses, or in some instances the dealership agrees on condition that the price is doubled; if it is concluded at the time of purchase and sale at the dealership it costs SR 500, and if the title is in his name it costs SR 1000. This is what happens daily at auto dealerships. Dealership owners monopolize the sale of new cars; they prevent the purchasers from reselling them to other dealerships and do not transfer their ownership to the purchasers. If the purchaser refuses this manner of sale, they refuse to buy the car from him and he is forced to comply due to his financial need which forces him to resort to buy on credit and sell for cash at the price stipulated by the dealership. This is the case I present to you, fearing Allah, and to absolve myself from any sin on the day I will stand before Him.May Allah grant you long life and increase your knowledge with what benefits the people. (Part No. 11; Page No. 69) We request a clarification of what is permissible and what is prohibited in what we do as mentioned above.


After the Committee examined the inquiry, its reply included that the conditions mentioned in the question are Batil (null and void) because once the sale is concluded, the buyer is free to dispose of the car, complete the necessary documents and sell it to whomever he wishes. He must remove it from the dealership from where he bought it, since he will not possess it except in this manner. The seller is entitled to put the car up as collateral for its price and prevent the purchaser from selling it until he pays its full price.May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.


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