Helping people to buy used cars with ribaa (interest)

This
way is haraam, because it is pure ribaa. Allaah says (interpretation of
the meaning):

“Allaah
has permitted trading and forbidden
Ribaa” [al-Baqarah 2:275]

This
is for a number of reasons:

(1)The financial
institution, as is quite clear from the question, is a ribaa-based
institution which deals in interest.

(2)The
method which you describe – whereby the financial institution pays the
value of the car to the vendor, then takes back its money with interest in
installments from the purchaser – is no more than a loan with interest.
It is as if the financial institution is lending the customer an amount of
money (such as $10,000) on the condition that he will pay interest (such
as 10%), so the customer repays the financial institution with interest in
installments (so the amount of $10,000 becomes $11,000). This is ribaa,
pure and simple, and this is not permitted. This is the ribaa of the
Jaahiliyyah which was forbidden by Allaah and His Messenger.

Allaah
says (interpretation of the meaning):

“O
you who believe! Be afraid of Allaah and give up what remains (due to you)
from Ribaa (from now onward) if you are (really) believers.And if you do not do it, then take a notice of war from Allaah and
His Messenger but if you repent, you shall have your capital sums. Deal
not unjustly (by asking more than your capital sums), and you shall not be
dealt with unjustly (by receiving less than your capital sums).”
[al-Baqarah 2:278-279]

“And
be afraid of the Day when you shall be brought back to Allaah. Then every
person shall be paid what he earned, and they shall not be dealt with
unjustly” [al-Baqarah 2:281]

The
Prophet
(peace and blessings of Allaah be upon him) said:

“All
the ribaa of the Jaahiliyyah is null and void, but your capital is yours.
Do not deal unjustly and you will not be dealt with unjustly.” (Narrated
by Abu Dawood, 2896; Ibn Maajah, 3064).

Al-Qurtubi
said in his Tafseer:

“The Muslims are agreed, narrating from their
Prophet
(peace and blessings of Allaah be upon him) that imposing the
condition of repaying something extra in a loan is ribaa, even if it is
only a handful of animal feed or, as Ibn Mas’ood said, even if it is a
single grain.”

Shaykh
al-Islam Ibn Taymiyyah said:

“The
scholars agreed that when the lender imposes the condition of paying back
something extra on his loan, this is haraam.”

(3)Moreover, the financial institution is also stipulating the
condition that the loan be repaid within a specific time limit, otherwise
an additional amount is to be paid. This is also a kind of ribaa.

One
of the statements issued by the second session of the Islamic Fiqh Council
was the following:

“Every
kind of interest or additional payment required in return for delaying
repayment of a loan when payment falls due and the debtor is unable to
pay, and interest or additional payments charged on a loan from the outset
– these are two types of ribaa which is forbidden according to
sharee’ah.

(4)After knowing the ruling on loans with interest, and knowing how
strictly this is forbidden by Allaah and His Messenger, it remains for us
to note that cooperating in ribaa – even if the one who helps does not
gain anything from that – and making it easy for people in any way,
shape or form, is haraam according to sharee’ah. Allaah says
(interpretation of the meaning):

“Help you one another in Al-Birr and
At-Taqwa (virtue, righteousness and piety); but do not help one
another in sin and transgression” [al-Maa’idah 5:2]

It
was reported that ‘Ali ibn Abi Taalib (may Allaah be pleased with him)
said: The Messenger of Allaah
(peace and blessings of Allaah be upon
him) cursed ten people: the one who consumes ribaa, the one who pays
ribaa, the one who writes it down, the two who witness it, the one who
makes it lawful, the one for whom it is made lawful, the one who withholds
sadaqah (charity), the one who does tattoos and the one for whom tattooing
is done.” (Narrated by Muslim, 50; al-Tirmidhi, 1038, and others).

The
Islamic Fiqh Council in its ninth session stated the following:

It is obligatory on all the Muslims to forbid that
which Allaah forbids of dealing in ribaa, whether accepting it or paying
it, or cooperating in it in any way, shape or form, lest they incur the
wrath of Allaah and open themselves to a declaration of war from Allaah
and His Messenger.

This
statement was issued by consensus.

On
the basis of the above, it is not permissible for you to participate in
initiating or concluding ribaa-based dealings between the purchaser and
the financial institution. You must look for other, permissible ways in
which your rights are also protected. Whoever fears Allaah and does his
duty towards Him, Allaah will make for him a way out and will provide for
him from sources he could never imagine. Whoever gives up something for
the sake of Allaah, Allaah will compensate him with something better. May
Allaah help us and you to do all good. And Allaah knows best.