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Fatwa CenterBuying a car through "trade in" transaction
Question
I would like to know if the so-called "trade in" transaction is Halal? I have an old car, and would like to by a new one. Can I go to a car dealer where he will evaluate the price of my old car and deduct it from the price of the car he is selling me? I was told it is Haram to do that? Please advice me regarding this matter, citing from Sunnah and Qur'an. Please advice me of a proper, Halal, way to perform this trade.
Answer
Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
Know that the car is not among the things that are subject to any kind of Riba whether it is Riba al-Fadhl or Riba al-Naseeah.
Therefore, if the exchange of the car takes place without cheating or hiding the defects of the car then it is permissible.
Allah knows best.
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