Re: Differences between Car Ijarah and Lease. Old Wine in a New Bottle???
Another thing bao bihari
rib'a is like trade, but there is not 'risk' that differentiates them. 'Risk' is what differentiates Lease from Ijara, but risk has nothing to do with typical rib'a.
If I lend someone some money and expect it back on day 20 and charge 1% on each day late there is no concept in the formula provided that equates to a risk differential. Rather the counter to the rule against rib'a arose as a result of people saying that in trade we put an amount above cost price so why can't we do the same with returning borrowed goods?
The reason why is because of these factors in trade:
The agreed value of the item at that moment
Both parties agree to that value - in the mind of the seller and the buyer the item value will have a range somewhere the two expected values will coincide and that becomes the agreed price/value of the good.
The overall amount of money to be paid will not exceed the value of the item.
Once these are in place we have a contract
If a loan is granted by the seller then it should be on agreed price as per contract ... to charge extra on the basis that it is a loan is called rib'a. Hence Islamic loans have to be on charitable grounds.
On the other hand if we have a smarty pants who says let's work out what the calculated/estimated total will be for an interest inclusive payment for a number of months, total this and put this amount on our sell price, then portion the loan repayments accordingly, then we can get the same money as though the item was being sold with interest.
The problem being that if I offered to pay the sum at once I would get a discount, and if I agreed on that discounted price then wanted to pay in instalments I would be disallowed and would have to pay either larger total amount by installment or a smaller amount if paid altogether - this is still interest, since the basis for the extra charge is the delay in getting the full amount.
Some clever establishments buy houses at market purchase rate then sell on to others at higher prices still. The problem is that they will not buy unless they get agreement that the end/purchaser first agrees a contract to buy. By binding the end purchaser to such an agreement this would translate to rib'a. The contract of the seller to establishment should be independent from establishment to buyer. The buyer should be able to negotiate a deal to a value that they are happy to pay without it being related to the contract that came before they looked for purchase.
The deeper insights in all of these methods is the artifical inflation of prices, as a result of rib'a or rib'a work-arounds, is that this is damaging for society and economy.
The fact that in these times both seller and purchaser can't always "agree price" because that is often determined by market. This is the dust of rib'a no doubt.
'Risk' has an element of something being halal or haram, but it is not technically what makes rib'a different from trade. I just thought I would mention this.
