A Car Dealership Charging Commission On A Sale

Question

Is it permissible for me to give a car dealer my car to sell. I tell him I want R50 000.00 for it. He will put it on his stand and try to find a buyer. He can sell it for what ever price he wants as long as I get my R50 000.00 when he is done. He has marked it for R70 000.00. 

Answer

The scenario that you have presented whereby you will give your vehicle to a motor car dealer at a lower price and he will then sell it at a higher price will fall in the category of a commission based sale in Shariah. You (the owner) will pay the car dealer a commission for  selling the vehicle if a sale is concluded. In other words, you require R50 000.00 for the vehicle and he will  receive a commission of R20 000.00, thus the car has been marked for R70 00.00. If this is the method  adopted, then the sale is in order.

In such a sale, it is necessary that the commission is  clearly defined. In the situation of selling it at “whatever price he wants to” the commission is left vague so that will not be permissible. The car dealer must be informed of the commission that he will be earning; either in terms of percentage
(for example, you tell him, sell it for R70000 and I will give you 10% of that); or apprise him of the commission in monetary terms (for example, you sell it for R70000, give me R50000 and you keep the R20000 as commission). In short, the agent (car dealer) should know what commission he will
be receiving; therefore it is necessary that, if not in terms of percentage, then at least in monetary terms, the final selling price of the vehicle is known as well as the commission (as explained by you in the enquired scenario that the dealer has informed you that he is selling the car for R70000 of which R20000 is his commission).

Checked and Approved By:

Mufti Muhammed Saeed Motara Saheb D.B.

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