Fatwa ID: 06968

Answered by: Maulana Abdul Malik

Question:

Does anyone know if the Black Horse car hire-purchase scheme is shariah compliant?

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

In principle, Hire purchase schemes are not permitted because the consist of two transactions occurring in one.

In this regard, Abu Huraira (May Allah be pleased with him) narrated: “The Messenger of Allah (صلى الله عليه وسلم) forbade two transactions in one.” (Sunan Nasa’i, hadith # 4632)[1]

However, when obtaining car financing it would be permissible for an individual to purchase a car with the payments fully or partially deferred. However, the total amount and time of the deferred payments needs to be fixed and clearly stated at the time of the contract. In such scenario it would be allowed to take such financing. (Raddul Muhtar, pg 52, vol 7)[2]

Therefore, if the Black Horse car financing scheme corresponds with the latter it would be permissible to use such financing.

[1] عَنْ أَبِي هُرَيْرَةَ، قَالَ نَهَى رَسُولُ اللَّهِ صلى الله عليه وسلم عَنْ بَيْعَتَيْنِ فِي بَيْعَةٍ ‏.‏

[2] وصح بثمن حال) وهو الأصل (ومؤجل إلي معلوم) لئلا يقضي إلى التنازع

Only Allah (عز و جل) knows best.

Written by Maulana Abdul Malik.

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham