There is no Harm in selling by Installment Payments
Question :
The cars that are sold by the method of installment payments, their price is increased if you buy them by the method of payments. This is like if the price of the car was 15,000 riyals in cash, it will be sold to the person for more than this value price by way of installment payments. Is this sale Riba?
Answer:
There is no harm in selling by installment payments as long as the times of payment are known and the installment payments are known. It makes no difference if the sale by installment payments is more in price than the sale by cash up front, because the buyer and the seller both benefit from the installments. The seller benefits by the increased amount and the buyer benefits by the extra time allotted to pay.
Indeed it has been confirmed in the Two Sahihs from 'A'ishah that Barirah was sold by her family (that owned her) by installment payments over 9 years. Each year she was to pay 40 dirhams. That proves the permissibility of the sale by install- ment payments. This is also because it is a sale that contains no treachery, no Riba and no unknown factors. Thus, it is permissible just like the rest of the legislated sales transactions.
Source:
Ash-Shaykh Ibn Baz
Fatawa Islamiyah, Vol. 4 Page 369
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