As salaamu 'alaykum.
A question on behalf of a relative who is a used car trader. In order for him to sell stock over a certain amount he would have to offer a finance option to the buyer such as HP, PCP and lease deals. Therefore he would acquire a FCA licence. As a result, in a transaction between trader (seller) and the buyer, the seller would receive money directly from bank and buyer would pay the bank in an interest-based agreement.
Is the car trader to permitted to have such a license and facilitate buyers to purchase through finance option even though the seller himself is not dealing with interest?
Jazak Allaahu khayr
May Allah bless you.
Can you elaborate on the following please:
This is referring to high value cars where a cash purchase isn’t feasible or limited to a few. Hence, by providing finance options he can access a wider market of consumers.
I believe that most scholars do not see conventional car financing as permissible. Therefore, it is best that he does not assist, with providing the finance options.
The reason is that, car finance involves interest based contracts according to most scholars, thus, helping others in an interest based transactions equals to ‘aiding in sin’.
The person should try to negotiate and work with a finance company to structure a shariah compliant alternative which he can offer. (@ibrahimkhan might know if this possible or not).
This will not only be beneficial for himself but for the Muslim customers.
If his entire business is dependent on offering financing, then my advice would be to speak to a local scholar about his situation. Under the dharurah (necessity) ruling, he might be allowed to carry on with the finance option until there is a way out of it.
And Allah knows best!
Jazak Allaahu khayr Shaykh for your response. So, essentially he’d be a credit broker in this instance. I will forward your response onto him inshaAllaah.