Assalamu alaikum,

Is it permissible in Islam to lease a car?

Basically, I pay $200-$300 per month for a new or a good used car for three years. At the end of the term, I return the car to the owner. It is kind of a long-term rent.

As you know, maintaining a car is expensive in North America, and I don't have the cash to buy a new one. So renting one without thinking about the maintenance can be an interesting option.


At a glance, there seems to be no problem in your definition of leasing. You (the customer) pay a rent (in Arabic it means إجارة) on a monthly basis and return the vehicle once you're done with the period.

But the reality is not the same. When implemented, leases or ijaarah don't work like this. There is a lot of fraud or cheating taking place and interest involved. I'm not talking about the interest on a financed vehicle.

For example, if you are the lease customer, you may have a 'clause' that states, if you delay payment, you will be charged a fine. People can call it any fancy name but this is interest.

So like this, there are many additional strings in the deal. So you should really search this specific leasing example and get clear details on what exactly happens.

And Allaah knows best!


Basically, such a lease is just a contract in which one sells the right to use a product (the car) rather than selling the product itself; in Islamic law such arrangements are known as ijarah.

While there are some difference of opinion on the specifics (e.g. defined length of contract or onus of maintenance), ijarah in general is considered permissible by most if not all schools as long as the leased product is not consumed by its normal use (e.g. one cannot "lease" money or food).

  • I do agree on what u said, but the problem is that most sellers will finance their cars with interest, so by leasing the car, i'll be paying interest implecitly?
    – Anas
    Oct 19 '13 at 2:11
  • That's impossible to determine without knowing the particular details of lessor and the lease contract itself.
    – goldPseudo
    Oct 19 '13 at 2:20

Asalamu Alaikom,

There is no interest involved when leasing a vehicle. The agreed upon "rental charge" is built in to the monthly payment, and it is based on the residual value of the vehicle (the projected value of the vehicle at lease-end).

In other words, leasing is only paying for the amount of the vehicle you have used, instead of paying for the whole vehicle.

Allah knows best!

  • Welcome to Islam.SE! Can you back up your answer with Islamic sources ? For more information on how to answer please review the Help Center>Answering
    – Sohaeb
    May 22 '14 at 20:33

as far as I understand leasing and financing both are different. In financing or PCP you are the one who borrows the money which may have interest but in leasing or PCH you doesn't borrow the money but only car for limited period of time. This is rental payments just like you are renting a house. As much as I understand this is halal as you never borrowed the money.


There is definately interest involved When leasing a car. I was told this by a car salesman when i was looking to buy or lease a new car(which ever didnt involve interest). The guy didnt sell me a car but explained to me how the dealership will always charge interest even if u insist on making an exception for you because your religion doesnt allow you to pay interest, in which case they will either give it another name or charge you full price of the car and add an estimated amount of interest to it and give you a fixed number. The only way to to go is either pay cash or wait for the manufacturer to offer 0%APR to buy a car and never make your payments late because the late fee is also considered interest.

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