Assalamu Alaikum: Can you please in detail explain to me the permissiblity of leasing a new car. Is it halal or not? Evidence of why its clearly halal or not? I find with a new car you get warranty and a lot of other important features while with a used car; you can easily be cheated by mechanics trying to make a buc. Abdul-Rahman Muhammad, New York

Alhamdu Lillah

Lease contract basically is not subject to Riba (interest), and there is no other reason for the prohibition of this contract.

Some people get confused because the car dealership sells the car to a bank or the like once the vehicle is rented, but this has nothing to do with the contract between the lessee and the lessor. What the Muslim lessee responsible for is the permissibility of the relationship between him and the lessor. As mentioned above, lease contract is permissible as long as the leased object is permissible (a car in your case).

What is prevalent here in the US is a contract called (Lease to purchase), which gives you the option and the priority of buying the vehicle by the end of the lease contract, or otherwise, to return it and rent another car,..and on.

As far as the warranty is concerned; warranty is a kind of commercial insurance, and it is not allowed if it is a paid service granted by a third party. But if the manufacturer or-at least- the car dealership provides it as a part of the deal, it is allowed, even if you need to pay for it. A well known Fiqh maxim (Void transaction is overlooked if included in a valid one)

يغتفر في التابع مالا يغتفر في غيره

Allah knows best