Assalam U Alaikum Sir,
I'm pakistan i had a really cery very important question. I want to know alot banks offer you a car on finance system for 3-5 years. I waana know is that halal or haram. I webt to one of islamic bank in pakistan. The guy told me surnwe do not take interest from you. It is not sood. The bank manager said i will say anything like interest or sood on our item.If you take a car for 4 years finance system we will charge you 7 lakhs rupee extra because after four years the currency value decreases. In whole pakistan every thing will be expensive by some specific ratio. So for that purpose we will charge you extra money because you will get your car now and you have to pay with in four years. So i just want to know that can i take a car from a bank on finance or not.
Assalam u Alaikum Wa Rahmatullah
There are many banks in Pakistan that provide Islamic financing for car purchases or home purchases. I am not sure of the details of all the Islamic banks in operation there as I do not live there but one of the most reliable ones are Al Meezan and Al Barakah Islamic banks.
The most common method used by these banks to finance cars is Ijarah. In this financing method, the buyer leases the car on a mutually agreed upon monthly payment for a specific term. Once the term matures then the car is sold to the lessee for a nominal purchase price.
The reason for extra charge that you have mentioned in your question is not acceptable for financing.
And Allah knows best.
Mufti Ikram ul Haq
Fatwa Center of America