04 - Contemporary Issue: Purchasing a Vehicle through Financing - Abu Fajr AbdulFattah bin Uthman

246 views·Dec 10, 2024

The Study of Contemporary Issues فقه النوازل Resources: Fiqh Council and Scholarly Research Materials Teacher: Abu Fajr AbdulFattaah Bin Uthman Session Four: Purchasing a Vehicle Through Financing Class Recordings: https://torontodawah.com/class-the-study-of-contemporary-issues-abu-fajr-abdulfattaah-bin-uthman/ Spreaker: https://www.spreaker.com/podcast/the-study-of-contemporary-issues--6155653 Class Handouts: https://drive.google.com/drive/folders/1cj07ilvKRYpQOnPlAuaXQYagiOiNLKI9?usp=share_link Timestamps: 0:0:58 - Are resolutions of Fatwa committees considered Ijmā’? 0:02:53 - Some Fatwa Committees may include dodgy members with a negative influence 0:5:32 - 4th discussion: Buying a car through financing (تمويل) 0:12:25 - How car financing works 0:13:35 - Al-Lajnah Ad-da'imah issued a Fatwa declaring finance contracts involving fixed APR% rates to be Haram! 0:14:12 - APR: Annual percentage rate (factors in admin fees, etc.) - The quicker payment is completed, the less the overall price - The longer taken to complete payments, the greater the overall price 0:16:43 - Difference between Fixed/Flat rates vs. variable interest rates (APR). * fixed rates don't change * APR fluctuates 0:18:27 - Are both interest rates impermissible? YES! 0:58:00 - Variable interest rates is worse because it carries more ambiguity, but both are impermissible! 0:19:00 - Riba An-Nasee'ah (aka Riba Ad-Duyoon) 0:19:58 - Installment purchases vs. loans 0:27:50 - Installment plans are permissible according to most scholars - so long as the contract (price & contract date) is agreed beforehand, and no 3rd party financer! ٠ Sh. Albani & Sh. Muqbil said it's impermissible because the Prophet ﷺ prohibited 2 sales in one contract (بيعتان في بيعة) 0:21:40 - Dar ifta misriyyah said financing is a type of muraabaha contract and so they said it is permissible * Very dodgy Fatwa! 0:22:50 - Three types of bank loans i. A loan is given in return for a greater repayment amount = (Haraam) ii. The bank acts as a middleman for customer by purchasing the commodity and selling it back to customer for a higher price with an installment plan [AKA Hired Purchase (HP)] = Some said this is permissible iii. Investment between the bank and different organisations and individuals 0:26:30 - It is permissible to introduce new types of business contracts as long as there's no Gharar (ambiguity) or Ḍharar (harm) 0:27:10 - Is financing Muraabah (an investment contract) or a loan (تمويل)? 0:31:50 - Late payments is a type of Riba - Exception given for non-debt related contracts (delayed pizza delivery) - Another exception given is necessity 0:57:00 - Contracts are considered according to their realities and not their names/wordings 0:59:00 - admin/membership fee used as a loophole to avoid Riba 1:01:00 - Shariah compliant financing? - HP Hired purchase (the bank buys the vehicle and sell it to in installments at a higher price) 1:03:30 - This can't be a binding contract وعد ملزم 1:04:40 - What is a buy-down? - pay a larger down payment to make it 0% APR. 1:05:30 - 0% APR is not necessarily zero interest, it may actually be 0.something% 1:13:40 - A survey was conducted in Canada (2023) encompassing 22 different car dealerships and the lowest APR offered was 0.99%. So there has to be some sort of percentage involved even if a person puts down a buy-down. 1:06:00 - Some may offer zero interest only for a particular term, if it goes over interest is applied 1:09:00 - Some charge interest and claim it is merely profit on the asset, if so why is finance company involved, and why is the contract arranged in such a way where the profit is on the loan and not on the asset?! 1:11:00 - In financing contracts, the car dealer is not the actual seller, they are merely acting as a middleman between the customer and the financer. Their commission is included as a percentage of the interest rate (it varies, but 2-3% is average) 1:24:00 - Some