Question:
Is it permissible to buy a Toyota on finance with 0% comparison rate. The terms and conditions of this deal is as follows:
Terms and Conditions: 1) Recommended drive away price includes 12 months registration, 12 months compulsory third party insurance, dealer delivery charge and stamp duty. 2) 0% comparison rate available to approved personal applicants of Toyota Finance for the financing of current generation Camry, Camry Hybrid & Aurion models. Finance applications must be received and approved between 19/9/2012 and 31/12/2012 and vehicles registered and delivered by 31/12/2012. 3) Maximum finance term of 48 months applies. Conditions, fees & charges apply. Comparison rate based on a 5 year secured consumer fixed rate loan of $30,000. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Toyota Finance is a division of Toyota Finance Australia Limited ABN 48 002 435 181, Australian Credit Licence 392536 4) $99 per week is available to approved personal applicants of Toyota Finance to finance the purchase of a current generation Camry Altise. Excludes demos. Drive away price of $28,990 (includes 12 months registration, 12 months compulsory third party insurance, dealer delivery and stamp duty) with a balloon final payment of $8,910 & 47 monthly payments in arrears not exceeding $428.68. Based on an annual percentage rate of 0%. Conditions, fees and charges apply. Offer valid until 31/12/2012. 5) Additional interest charges accrue whenever a balloon final payment option is selected. Comparison Rate of 0% is based on a 5 year secured consumer fixed rate loan of $30,000. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Toyota Finance is a division of Toyota Finance Australia Limited ABN 48 002 435 181, Australian Credit Licence 392536. I had a chat with the dealer as there's no other fees/conditions. I have to pay total amount / 48 months (max). Please inform me as early as possible. Thanks for your help. Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
This deal is not permissible. The detail of this is as follows:
"Additional interest charges accrue whenever a balloon final payment option is selected" The above clause combined with the fact that there is a maximum monthly amount which cannot be exceeded means that one cannot avoid paying interest. "Drive away price of $28,990 (includes 12 months registration, 12 months compulsory third party insurance, dealer delivery and stamp duty) with a balloon final payment of $8,910 & 47 monthly payments in arrears not exceeding $428.68." The final amount in the example above exceeds the principal amount of $28,990. The excess is interest in the Shariah. Putting a limit on the maximum amount a person can pay every month is not allowed in the Shariah. ("...& 47 monthly payments in arrears not exceeding $428.68") A person must be allowed to pay as much as he wants, in order to finish off the payment as soon as he can. Also, it seems that they have combined the sale of the car and the finance of the car into one transaction. In the Shariah, each transaction must be separate and distinct from the other. Hence, my conclusion is that this deal is not Shariah compliant and, therefore, is not permissible. And Allah knows best Mufti Faizal Riza 1/12/2012 Checked and approved by: Mufti Ebrahim Desai Darul Ifta Australia www.mufti-online.net 
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