Can a car dealer refer customers to finance company?
I am a car trader. Sometimes I have customers who are unable to finance the purchase of the cars. Some of them source their own finance from a third party company and pay me directly for the vehicle. Sometimes the finance companies purchase a car from me for their clients.
However, if a customer comes to me directly, is it permissible for me to refer customers to third party companies considering that the third party companies provide interest based loans? If I do not take a commission, is this permissible? I would merely make the referral and the finance company would purchase the company from me. This is no different to if I did not make a referral. If this is not permissible, I would like to know if the income from this is ḥalāl.
بسم الله الرحمن الرحیم
- If a finance company purchases a car from you at a fixed price without you making a referral, it is lawful for you to sell the car.
- It is not permissible for you to refer customers to third party finance companies that provide interest based loans (Qurʾān, 5: 2). However, if the customer take an interest based loan on his own accord, you are not responsible for this.
- It is not permissible for you to take commission for such a referral, and any commission you have acquired thus far must be given in charity without intention of reward and forgiveness from Almighty Allah must be sought. (See Fatāwā Maḥmūdiyyah, 24: 406, 429).
- If the company has already purchased a car from you as a result of your referral, the income will be lawful so long as the transaction is Sharīʿah compliant; namely the price is fixed and there are no conditions or connection with the financing transaction. However, any additional benefits resulting from the referral such as the commission are to be given in charity as explained above. In future, avoid making referrals. (See Fatāwā Maḥmūdiyyah, 24: 406, 429, 452).
Allah knows best
7 Jumādā al-Ūlā 1438 / 3 February 2017
Approved by: Mufti Shabbir Ahmad Sahib and Mufti Tahir Wadi Sahib