The ruling on Selling Cars by instalments

Question:

One of the brothers who do business in buying and selling cars by instalment payments asks a question saying that he sells the car on the basis of monthly instalment payments. In this he makes an agreement with the person who wants to purchase the car on instalment payments, and this is due to the person's need to do so. Thus, he agrees with him to the sale before he buys the car for him, guaranteeing his profits first. So, what is the ruling on that?

Answer:

If the sale of the car and similar items is made to the one who wishes to purchase it after the seller owns it and it is specified by its name, and the seller actually possesses it, there is no harm in that. However, before that (possession by the seller) it is not permissible (to sell it). This is due to the Prophet's statement to Hakeem bin Hizam: Do not sell what you do not have.

It is also due to his - Sallallahu alaihi wasallam -. Statement: It is not permissible to make a condition of a loan along with a sale, or to sell what is not your possession.

Both of these Hadiths are authentic, so it is obligatory to act according to them and to beware of whatever opposes that. And Allah is the giver of success.

Source:
Shaykh `Abdul-`Azeez Bin Baz
Fatawa Islamiyah Darussalam VOL:4 NO.369