haram?
it depends how you interpret "interest" .. I have seen different interpretations of "interest" on this forum... If you think "interest" is haram then traditional auto loan is haram too...
some individuals justify an auto-loan and home-loan using the term "owner finance" ... lets say you are buying Honda and Honda company finances the car then it is not haram... why ? according to them if the owner says I will give you the car for $1000 and you can't afford it , the owner can then offer you and say I will give you the car for $110 a month for 10 months... so the price of the car that the owner is selling at is $1100 and not $1000 .... although the contract is explicitly mentioning the word interest and stating that you will be paying $100 in interest... and supporting the very system that is being questioned if you were to take out a loan form a tradtional bank...
Have you looked at the Islamic Financial Institutes for financing or lease options?
As Chachoo mentioned, if you accept the interpretation that bank interest is the same as riba and thus haraam, then you still have the option to buy an older cheaper car.
Ofcourse, there is a difference of opinion on that, and there are many scholars who believe that due to time factor of money and inflation (both of which were not present in early days of Islam), the current banking system is no where similar to the usury/riba based transactions.
am in the US... any 'islamic' options here?
Here is one:
http://www.lariba.com/financing/auto.shtm
Guidane Financial I think just does home mortgages
I believe there a couple of more options but I can’t recall them right now… if I find them I will let you know.
thanks !