What is the ruling on lease-to-own in car companies, which involves an initial and a final payment, where the car remains in the company's name until all installments are paid, and the car is repossessed if the lessee stops payments for four months?

What is known as "ijara muntahia bi tamleek" (lease ending in ownership) includes both permissible and impermissible forms. The Islamic Fiqh Academy has clarified its jurisprudential regulations.

Criterion for Prohibition: The combination of two contracts (lease and sale) on a single item at the same time.

Criteria for Permissibility: 1. Separating the two contracts in time (the sale contract comes after the lease contract) or the existence of a promise of ownership. 2. The lease must be genuine. 3. The responsibility for the leased item's guarantee rests with the owner. 4. Insurance must be cooperative and borne by the owner. 5. Application of lease rulings first, then sale rulings. 6. Non-operational maintenance expenses are the responsibility of the lessor.

Among the Prohibited Forms: 1. The lease automatically transforming into a sale without a new contract. 2. Suspending the sale contract on the payment of the entire rent. 3. The lease being coupled with a sale that includes a "khiyar al-shart" (option clause) for the lessor.

Among the Permissible Forms: 1. A lease with a gift of the item after the full rent has been paid (either through a separate contract or a promise). 2. A lease that grants the lessee the option to purchase the item at market price after the installments have been paid. 3. A lease with a promise to sell the item after the full rent has been paid, at an agreed-upon price. 4. A lease that grants the lessee the right of option to own the item at any time through a new contract and at market price.

There is no harm in the lessee paying an initial or final installment if it is part of the rent or a price, in accordance with the regulations, nor in the car remaining registered in the company's name, or in terminating the contract if the lessee breaches their obligations; as the Prophet, peace and blessings be upon him, said: "Muslims are bound by their conditions."