Dr. Monzer Kahf, a prominent economist and counselor, states the following: Leasing, in general, is permissible; however, some car lease contracts may have conditions that are not permissible such as the interest and penalty clauses for delayed payment. Financing from the seller may take the form of interest that makes it not permissible (cash sale plus interest for installment). It may take a permissible form also (sale on installment at a price that is higher than the cash price). Although the difference may appear superficial, it is in fact not: 1) a matter of principle (an increment in a loan is not permissible and not morally and factually justified); 2) if you allow increment in a loan, you justify interest on delinquency, this is clearly not permissible according to the Qur’an; and there are other more complicated differences.
Leasing in Islamic Perspective
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