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Installment sale

Q: A person from the United States is asking about those who sell cars in installments, and about the deferred sum with fixed interest, which increases due to delaying the installment in its due term. Is this dealing permissible?


A: If the person who sells a car is selling it for a fixed price and for a definite term or terms in installments which do not increase the price, (Part No. 13; Page No. 155) then there is no harm in this. This is based on the saying of Allah (Glorified and Exalted be He): O you who believe! When you contract a debt for a fixed period, write it down. It has been authentically reported that the Messenger of Allah (peace be upon him) bought on a fixed term. However, if the deferred sum -as stated in the question- increases due to delaying the payment in its due term, then it is not permissible according to the Ijma` (consensus of scholars). In this case, it will be like usury that was practiced in the pre-Islamic period for which the Qur'an was revealed. It is like the saying of the creditor to the debtor when the time of payment comes: Either pay or I will increase the sum. May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.


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