IS PURCHASING A CAR ON INTEREST TERMS PERMISSIBLE?

QUESTION:

As Salaamu Alaikum,

A husband works and lives in Canberra and a wife lives in Melbourne with her kids. The wife needs a car in Melbourne to buy groceries, medical appointments, and get to other commitments for her children thus she has a car. The husband also needs the usage of a car to go to work (and public transport is not good in Canberra). His current car is very old and can break down anytime and needs to be replaced. The family doesn’t have the financial abilities to buy another car. In this situation can he purchase on interest term as there is no interest free finances available. This car would be the only car the husband would own if he were to replace his current car. Jazak’Allah

ANSWER:

Wa Alaikum As Salaam,

Entering into a transaction where you will be required to pay interest is Haram (unlawful) in Islam, except when you have a compelling and urgent need to fulfill and nothing else is available to fulfill that need except that you enter into such a transaction. If any situation arises like this, then you will be allowed to access only that amount (of funds) which can fulfill the minimum of your compelling need. This is the general guideline which has been given by the expert Jurists (Fuqaha). (Kitabul Fatawa Vol. 5 page. 320 Zam Zam publication Karachi 2008).

With respect to the situation which is mentioned in your query, I (personally) do not see it as being a valid reason to take an interest bearing loan from a financial Institution to replace the old vehicle. In your explanation, you mentioned that ‘the current car is very old and can break down anytime’. This means that the current car is working and has not broken down as yet. Therefore, a compelling/pressing need has not yet come about for the husband to replace the vehicle, and there will be no allowance in the Shariah for one to go towards a haram transaction when there is no justifiable reason to do so.

If the car breaks down, then the husband should get it repaired/fixed. If this is done, then he would be able to continue to use it as long as it can be used. If however, it cannot be fixed/repaired due to its old age, and there is the compelling need to get the car because of the situation at home, then the husband can try to borrow the money (free of interest) from a friend or relative before he decides to go towards the interest bearing loan at the bank. If he is not able to access an interest free loan from anyone, and there is no way of getting the vehicle except through the financial Institution, then it will be allowed only to the extent of fulfilling the pressing need. When the situation reaches to this level, I advise the person to contact his local Mufti/Scholar who will look at his situation and advise to the best course of action.

And Allah Knows best

Mufti Waseem Khan

19/08/2019