Darul Iftaa Mahmudiyyah

Car dealer and purchaser

· 7 Dhuʻl-Hijjah 1435 AH1 min readFatwa 30721English

Question

A car dealer offering 0% apr on car instalment. Car cash value is £10,999 but they are charging £12,500 since the finance company is a third.party and they are charging their fees of £1500 approx. the dealers are saying that this is 0% apr as the fees will go to.finance company. will this be considered as an interest-free transaction although I will be paying more than what the car is worth over the period of 5 years? although the difference is going to the finance company and the dealer is adamant it is 0% apr (non-muslims) Im not convinced.

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Please give details of the financing company’s relationship with both the car dealer and purchaser. Also, please explain where the fees come in to the contract.

It may be expedient to forward us a link for this particular scheme for a thorough understanding.

And Allah Ta’āla Knows Best

Hisham Dawood

Student Darul Iftaa
Chicago, USA

Checked and Approved by,
Mufti Ebrahim Desai.

Answered by
Hisham Dawood
Checked & approved by
Mufti Ebrahim Desai
View original Compare with other Darul Iftas
Questions about this ruling, answered only from the archive with sources.

Where scholars differ, it’s safer to take the more cautious view.

Fatawa SA is an independent, read-only index of fatawa already published by Darul Iftaa Mahmudiyyah. It is not a fatwa service. For your own situation, please ask a Mufti. Report an issue

For corrections or mistakes, please email us at fatawasa786@gmail.com.

Source: Darul Iftaa Mahmudiyyah — https://askimam.org/public/question_detail/30721
Fatawa SA: https://fatawa.co.za/fatwa/askimam-30721

Related fatawa