Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

CAR FINANCE IS HILAL OR HARAM 

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

Answer:

Car Finance

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Dear and beloved brother in Islam, it is not the concept of car-financing itself, but rather how exactly the financing is done which will determine whether the transaction is lawful or unlawful.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib

Ali said he heard Allah's Messenger (saws) invoke the curse of Allah on those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.

If the ‘car-financing’ is done through a conventional interest-based bank or financial institution, because the transaction has an involvement of paying interest when financing the purchase of the car (or any other product), then indeed such a transaction would be absolutely unlawful for the believers who sincerely fear Allah and the Last Day.

But if the car is financed without the element of interest, or through a Shariah compliant non-interest based Islamic financial institution, then such a transaction would be lawful in the Sight of Allah Subhanah.

Thus beloved brother, it is not the concept of car-finance itself, but the interest element in the transaction which determines its permissibility or prohibition.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan