1 What is the Islamic law about buying a car on installments? Many auto companies and authorized car selling agencies sell new and used cars on installments. Thus, when customers go to buy those cars, the companies refer them to certain institutions such as banks and insurance companies. The companies get back the capital as well as the interest in monthly installments stretched over a number of months or years. If someone fails to pay his installments on time, the company overcharges the defaulter. The interest rate is determined on the basis of certain important factors such as the client's turnover, amount of income or timely-repayment of installments. The amount of interest generally paid is 4%, 3% or 5% or more or less. What is the Islam law with regard to buying a car on monthly installments keeping in view the foregoing details?