Category: the book of sales Transactions

The ruling on selling by Installment Payments

Question :

A person says I am a man who possesses a sum of money and I invest it in buying cars for cash. The price of the car may be 9,000 riyals, then I sell the car on installment payments over a period of a year or two for the total sum of 14,000 or 10,000 riyals after I take a down payment of 2,000 or 3,000 riyals. I am in doubt as to whether this sale is correct or Riba. What is the ruling on what passed regarding this means of sale, while knowing that I have been dealing for a period of two years by this method?

Answer:

Indeed Allâh has allowed selling (business) and forbidden the Riba. He said:
"And Allâh has allowed selling (i.e., business) and forbidden the Riba."

From that which He allowed of selling is selling for delayed payment. The legislation of this is proven by His Statement:
"O you who believe, when you contract a debt for a fixed period, write it down. Let a scribe write it down in justice between you. Let not the scribe refuse to write as Allâh has taught him."

Al-Qurtubi said in his Tafsir, "This includes all types of contracts of debt (i.e., loans) according to the consensus (Ijma')." It has been confirmed in the Two Sahihs from 'A'ishah that Barirah's family (that owned her) sold her for 9 Awaaq (pieces of silver) to be paid in 9 installments of 1 Uqiyah every year, and the Prophet approved of that. By this it is known that the dealing in the form that the questioner asked about is permissible, as it is included in the general meaning of the Verse. And success is with Allâh. May Allâh send blessings and peace upon our Prophet Muhammad, his family and his Companions.

Source:
The Permanent Committee
Fatawa Islamiyah, Vol. 4 Pages 367-368