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Question: O Shaykh, may Allaah bless you with good health. I am a working man with a small salary, and I do not have any other way to buy a car other than via the bank – in an arrangement whereby I rent the car [at a higher rate], which ends with me owning it. This is the only way I am able to own a car.
Response: No! No my brother! No my brother! this arrangement is not permissible – whereby you rent the car [at a higher rate], which ends with you owning it.
The Council of Senior Scholars have [thoroughly studied this arrangement, and subsequently] issued a ruling prohibiting this.
[That said] however, if you do not have a car, then you can rent one until such time you have enough funds to buy a car [outright].
Yes.
Translation originally published on 16 August, 2017
Hire Purchase (HP): A method of paying for something in which the buyer pays part of the cost immediately, and then makes small regular payments until the debt is completely paid. Note, the buyer can use the product, but does not legally own it until the final payment is made.
