Rent-to-own scheme on purchasing vehicles

Question 382:

Kindly advise us as to whether the following is permissible or not: If we need to buy a vehicle that costs 500,000 rupees, we need to pay 200,000 rupees to the company. The company in turn would buy the vehicle in company’s name and rent the vehicle to us on a fixed rent.  Whenever we pay an excess amount with the rent, that excess amount would be used to cover the rest of the cost of the vehicle.  Once we pay the entire amount, the vehicle would be registered in our name.


The dealing of aforementioned is based upon Ribaa, it is prohibited and not permissible. Barakallaahu feek. Any benefit which comes along with the loan is Ribaa. So the benefit gained (in the name of rent) is clear Ribaa.

Answered by : Shaykh Abu Hudhaifa Abdul Ghani ‘Umari hafidhahullah

Translated by : Abu Muhammad Nezam Uddin Al Hindi