Home
Discover Islam
Quran Recitations
Lectures
Fatwa
Articles
Fiqh
E-Books
Women
Boys & Girls 
Enter Question
View By Subject
Fatwa Of The Week
Selected Fatwa
Fatwa CenterDealer buys cars from the bank and then sells them at higher price
Question
Assalam o alaikum I am planning to finance a car without interest, I went to a dealer few days ago and he told me that what they do for us Muslims is that they buy from bank and sell us for a higher price (that essentially includes the interest which dealer pays to bank and they add it up to the total price), now does Islam allows us to get involved in this kind of trade or its just getting to the same ear by two different means.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His Slave and Messenger.
If the person who is going to sell you the car is its owner in the first place or buys it and takes possession of it and then sells it to you for a known price and does not stipulate any fines in case payment on the original price is delayed, then there is no harm in such a transaction and there is no objection to buying the car even if the seller adds all costs and profits to the sale price. What matters is that the price is known and does not increase in case the buyer is late in payment of the original price, and that the sale transaction is real and actual.
There is a difference between an interest-based loan and a trade transaction. Allaah, The Exalted, says (what means): {…That is because they say, "Trade is [just] like interest." But Allaah has permitted trade and has forbidden interest…}[Quran 2:275]
Allaah Knows best.
Search Fatwa
Fatwa Subject
