I am planning to buy car on finance monthly installatment but the dealer said they will increase the price in order to make interest free. They might add interest or profit to increase the price but it is not clear. Is it halal if they add interest to increase the price of the car than the cash price as I will pay monthly installatment?
I am planning to buy car on finance monthly installatment but the dealer said they will increase the price in order to make interest free. They might add interest or profit to increase the price but it is not clear. Is it halal if they add interest to increase the price of the car than the cash price as I will pay monthly installatment?
23Jan
ANSWER:
If they fix the price beforehand and sell the car for you for say 120,000 and the actual price of the car is 100,000 and this 120,000 would not change at the end and you pay in monthly installments for say 5 years, this is permissible, providing the dealers own the car beforehand.
I am planning to buy car on finance monthly installatment but the dealer said they will increase the price in order to make interest free. They might add interest or profit to increase the price but it is not clear. Is it halal if they add interest to increase the price of the car than the cash price as I will pay monthly installatment?