Is it possible to contract hire a car on the bases of PCP (Personal Contract Purchase)?

Question

I would like to contract hire a motor vehicle over three years and to do so via PCP. The manner in which it operates is you select the car and monthly payments are agreed, with the option at the end of the three years to purchase the vehicle, trade in for new or give it back.My concern is that the initial purchasing is based on interest added to the vehicle but can I still contract hire and give the car back after three years?

Moulana Imraan Vawda · Accepted Answer

We would appreciate if you give us more details on the contract. If you have any documentation on the contract, please forward it to us.

If you have the right to trade in, then it appears that you are an owner. On the other hand, you can simply return the car without any return. This applies that the car is not yours. There seem to be some contradiction. We would thus like to examine the exact nature of the contract.

Does one have to decide on these options before the hiring, or at the end of three years? Please provide more details.

and Allah Ta'ala Knows Best

Moulana Imraan Vawda
FATWA DEPT.

CHECKED AND APPROVED CORRECT: Mufti Ebrahim Desai

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