Answer: If no binding contract was concluded between you and the borrower before the car was purchased—there was merely a promise or an informal understanding—and then you (or both of you) went, bought the car, and only afterwards sold it to him, there is no harm in that.

But if the sale contract between you and him was executed before you actually bought the car—meaning that the two of you agreed upon and finalised the contract and only then went and bought the car for him—this is not permissible. The Prophet (peace and blessings be upon him) said to Ḥakīm ibn Ḥizām, “Do not sell what you do not possess.” Nor can this be regarded as the sale of a described item on liability, like a salam sale, because that type of transaction requires the price to be paid in full before the parties disperse and it must not be an exchange of one debt for another.

In short, it is impermissible to finalise the contract before you have acquired and taken ownership of the car. Once you have obtained it and become its owner, you may then sell it to him for a deferred price higher than the cash price, and he may afterwards sell it to someone other than you. This is the well-known tawarruq arrangement mentioned by the scholars: a person in need of cash buys a commodity from someone on deferred terms so that he can resell it and benefit from its price, on condition that the original seller does not buy it back.

Question: And is this permissible?

Answer: According to the majority of scholars it is permissible, and this is the correct view, God willing, because of the need involved; the person of limited means has no other recourse but to act in this manner.

Thus, if these conditions are fulfilled—namely that the car is in the seller’s ownership before he