{"id":33904,"date":"2024-11-22T10:58:39","date_gmt":"2024-11-22T10:58:39","guid":{"rendered":"http:\/\/daruliftabirmingham.co.uk\/home\/?p=33904"},"modified":"2024-12-28T01:17:12","modified_gmt":"2024-12-28T01:17:12","slug":"buying-a-used-car-from-a-dealer-who-charges-interest","status":"publish","type":"post","link":"http:\/\/daruliftabirmingham.co.uk\/home\/buying-a-used-car-from-a-dealer-who-charges-interest\/","title":{"rendered":"Buying A Used Car From A Dealer Who Charges Interest"},"content":{"rendered":"

Fatwa ID: 07705<\/strong><\/span><\/p>\n

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Answered by Alimah Shireen Mangera-Badat<\/strong><\/span><\/p>\n

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Question:<\/b><\/span><\/p>\n

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I am looking to buy a used car for my family ( an old car which has broken down). I don’t have access to cash and dealers charge interest. I checked with a dealer who sent me the following message.<\/span><\/p>\n

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“Your bottom price will be the same. We can buy down the interest rate from the lender and we can just add that to the price of the vehicle, so you are not involved with the interest directly”<\/span><\/p>\n

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Is this permissible?<\/span><\/p>\n

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In the name of Allah, the Most Gracious, the Most Merciful<\/strong><\/span><\/p>\n

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\nAnswer<\/strong><\/span><\/p>\n

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When considering the option of purchasing a used car with a financing arrangement where the dealer suggests “buying down the interest rate” and including that cost in the overall price of the vehicle, it’s important to evaluate whether this approach aligns with Islamic principles.\u00a0<\/span><\/p>\n

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The dealer mentions “buying down the interest rate” and adding that cost to the price of the vehicle.\u00a0<\/span><\/p>\n

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Interest (Riba):<\/b>\u00a0Even if the interest is being handled indirectly by the dealer, it remains a form of riba because the transaction inherently involves a lender charging interest on the financing.<\/span><\/span><\/p>\n

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This is not permitted in Islam by the clear verse of the Quran for those that class trade as interest in Surah Baqarah: 275,<\/span><\/p>\n

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Those who consume interest will stand <\/b>\u02f9<\/b>on Judgment Day<\/b>\u02fa<\/b> like those driven to madness by Satan\u2019s touch. That is because they say, \u201cTrade is no different than interest.\u201d But Allah has permitted trading and forbidden interest\u2026\u2026..<\/b><\/span><\/p>\n

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Adding Costs to the Vehicle Price:\u00a0If the dealer increases the price of the car to cover the cost of buying down the interest rate, this is essentially masking the interest by embedding it into the total price.<\/span><\/p>\n

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In Hanafi Fiqh, engaging in any transaction where interest is a component\u2014whether directly or indirectly\u2014is impermissible. The Prophet Muhammad <\/span>\ufdfa<\/span> cursed the one who consumes riba, the one who pays it, the one who writes it down, and the witnesses to it, indicating that any form of involvement in riba is sinful (Sahih Muslim: 1598).<\/span><\/span><\/p>\n

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Therefore, based on the explanation provided by the dealer, the transaction would not be permissible, as it indirectly involves riba. You should explore alternative financing options that comply with Islamic principles to ensure that the purchase is halal, such as:<\/span><\/p>\n

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