Assalam Aleekum
Is there is such as thing. If yes, what Is It.
take care
See this answer, particularly the option offered in the last paragraph…
http://www.sunnipath.com/resources/Questions/qa00004177.aspx
I knew this too that bank(or leasing company) first puchase the car and then sell it to you in installmennts, is islamically legal and does not fall under the category of Riba (interest).
I think it happens this way, here the leasing company pays the amount to party and purchases the vehicle, the car is in the name of leasing company. And when you pay the full amount it gets transfered in your name.
so it should be ok then ? 
I don’t blame you if you are confused. Arab Mullahs do not understand modern English or modern economic system. Their knowledge is limited to the stuff 1400 years ago.
I have seen many dubious schemes labeled as “Islamic” and “interest free”. The capital used by all these schemes come from the same source and thus subject to the “prime rate” of lending. Modern day “interest” is simply a bank fee tacked on the “prime lending rate”. Based on your credit history, banks will evaluate their risk and give you a “markup” or “bank fee” for any amount of loan. You can call it lease, or loan, or any other shebang.
These so called Islamic banks are nothing but brokers for other banks. If you want to support them, by all means do so. But the real $$ or Rs. is the same that you may get from any lending institution.
Coming back to car financing! The declared interest rate is just one piece of the puzzle. It really depends on trade in, the money down and the loan payback period. You combine all these factors and get the monthly payment.
The monthly payment on a car is higher if you lease (rent to own) and lower if you take a loan to buy the car. Simply! Because the risk to the bank is lower when you buy instead of renting the car.
Go ahead and lease the car if it gives you satisfaction of being “Islamic”. Remember Islam also tells us not to get fooled and pay more or take more risk for the same item.
The best bet - I'd say go buy american cars as most of them nowadays give you 0% financing. This will solve all your issues about interest.
Do it for the sake of Allah(swt) and ask for His guidance.
Does the car come with beard?
Antiobl
If these arab mullahs are stuck in a time warp with limited knowledge, then you must be living in the Ice Age, because they sure as hell are way more advanced and economically better off than you using their financial system.
And they drive better cars than you!
Stick to riding the donkey up the Khayber Pass using the National Bank of Dungarstan for your donkey purchase?
Assalam Aleekum
What happens If person makes late payment.
Take care
^ beheading... and lashes.
Default Notice!
yeah, if rehman1 misses a payment, Madhanee gets his a$$ whooped! :k:
I am financing my car in a way I looked at very carefully and which did not seem to violate any Islamic tenets that I am aware of. I would be genuinely interested to know if anyone here knows of anything that I missed which would make what I've done unislamic.
I bought my car on a hire-purchase scheme, which had a quoted rate of 14.9% .
My car cost £11,500 , which I did not have at the time of purchase. Instead, I paid £3000 to Honda Finance Ltd. Honda Finance Ltd took this money, then they bought the car for £11,500 and it became their legal property.
They are currently leasing the car to me for £370 a month for 24 months. At the end of 24 months, they will sell me the car for £25 pounds if I wish. Only when I have paid the £25 will the legal ownership of the car pass on to me.
They have not lent any money to me at all, so without a loan I cannot see any possibility for riba to occur.
I have literally agreed to rent the car for 24 months, providing a non-refundable £3000 deposit, with the option of buying the car for £25 pounds after that period.
If I miss a payment, then according to the contract I signed they have the right to take their car back from me.
So they will earn a "profit" of £405 over 24 months on an investment of £8,500, with no chance of a loss (for them). Are you sure that hire-purchase rate was 14.5%, cz what you are paying sounds way too low? Atleast the residual is way too low.
[QUOTE]
*Originally posted by mAd_ScIeNtIsT: *
I am financing my car in a way I looked at very carefully and which did not seem to violate any Islamic tenets that I am aware of. I would be genuinely interested to know if anyone here knows of anything that I missed which would make what I've done unislamic.
I bought my car on a hire-purchase scheme, which had a quoted rate of 14.9% .
My car cost £11,500 , which I did not have at the time of purchase. Instead, I paid £3000 to Honda Finance Ltd. Honda Finance Ltd took this money, then they bought the car for £11,500 and it became their legal property.
They are currently leasing the car to me for £370 a month for 24 months. At the end of 24 months, they will sell me the car for £25 pounds if I wish. Only when I have paid the £25 will the legal ownership of the car pass on to me.
They have not lent any money to me at all, so without a loan I cannot see any possibility for riba to occur.
I have literally agreed to rent the car for 24 months, providing a non-refundable £3000 deposit, with the option of buying the car for £25 pounds after that period.
If I miss a payment, then according to the contract I signed they have the right to take their car back from me.
[/QUOTE]
Assalam Aleekum
What happens If you miss a payment.
take care
the reason that I am asking this is b/c a certain Islamic Bank
says If a person misses a payment, the bank will compell
the person to pay a certain amount to a charity. If the bank
charges a amount than It will be interest.
and Islam-qa.com website says that a person must not be compelled to
pay more If he misses a payment.
take care
0% is just a sales ploy. Typical profit of 5% is added to the sales price and the car is then labelled as 0%.
As a test, tell the car salesman that you will pay cash. He will immediately drop the sales price of the car. The difference of the two sales values is the interest amount that 0% scheme is charging you.
I hope it clarifies the issue.
[QUOTE]
*Originally posted by zman: *
The best bet - I'd say go buy american cars as most of them nowadays give you 0% financing. This will solve all your issues about interest.
Do it for the sake of Allah(swt) and ask for His guidance.
[/QUOTE]
Maddy! your values are mixed up. Read the contract again. This is nothing but a lease option on the car. Nothing Islamic (or un-Islamic) about it.
[QUOTE]
*Originally posted by mAd_ScIeNtIsT: *
I am financing my car in a way I looked at very carefully and which did not seem to violate any Islamic tenets that I am aware of. I would be genuinely interested to know if anyone here knows of anything that I missed which would make what I've done unislamic.
I bought my car on a hire-purchase scheme, which had a quoted rate of 14.9% .
My car cost £11,500 , which I did not have at the time of purchase. Instead, I paid £3000 to Honda Finance Ltd. Honda Finance Ltd took this money, then they bought the car for £11,500 and it became their legal property.
They are currently leasing the car to me for £370 a month for 24 months. At the end of 24 months, they will sell me the car for £25 pounds if I wish. Only when I have paid the £25 will the legal ownership of the car pass on to me.
They have not lent any money to me at all, so without a loan I cannot see any possibility for riba to occur.
I have literally agreed to rent the car for 24 months, providing a non-refundable £3000 deposit, with the option of buying the car for £25 pounds after that period.
If I miss a payment, then according to the contract I signed they have the right to take their car back from me.
[/QUOTE]
[QUOTE]
*Originally posted by Madhanee: *
^ beheading... and lashes.
[/QUOTE]
OK I am confused. DO they behead you first and then apply lashes or lashes first and then beheading. Furthermore can you request that you be lashed in public but behead in private with your family members peering over the one way glass.
In 7th Century Arabia they used to lease Khotis. 14.8% APR with an option to buy at the end of the lease. Camel leasing was not introduced until well into the 9th century.
When the rest of the world will have colonies on Mars, Ummah will still be calculating the Islamic interest on car payments.
