Halal car finance UK: what makes an agreement compliant, and who certifies it
Conventional hire purchase, PCP and personal loans all charge interest, which is what puts them outside what many Muslim buyers will use. The alternatives are not interest by another name, but they are not all the same either.
- agreements cover almost every financed car in the UK
- 3
- to withdraw from a regulated credit agreement, Consumer Credit Act 1974 s.66A
- 14 days
- of the total price is the voluntary termination ceiling, Consumer Credit Act 1974 s.100
- 50%
Figures in this panel are the statutory rights that attach to a regulated motor finance agreement, quoted from the Consumer Credit Act 1974 itself and linked in the sources below. KnownVehicle is not authorised for credit broking and introduces no lender: nothing on these pages is a quote, an application or a recommendation.
- 2 vendor product pages verifiedevery figure matched verbatim to the vendor's page
- Quoted and dated, never estimatedlast verification pass 2026-08-26
- 2 check types coveredeach with measured search demand behind it
The structures offered instead
- Murabaha: the financier buys and resells at a disclosed mark up. The provider buys the car and sells it to you at a price that includes an agreed profit, payable in instalments. There is no interest rate as such because the total price is fixed at the outset and does not change with time. What you compare between providers is that total, not a rate.
- Ijara: a lease with ownership at the end. The provider owns the car and leases it to you for an agreed rental, with ownership transferring at the end of the term either by gift or by a separate purchase. It resembles a PCP in shape, and the difference that matters is who carries ownership risk during the term.
- Buying outright, which is the plainest answer. Saving and buying without credit avoids the question entirely and is the cheapest route on any measure. The reason the other structures exist is that most people cannot bridge the whole price at once, not that they are better value.
- Check who certified the product, not who advertises it. Whether a specific product is sharia compliant is a matter for scholars, and reputable providers publish the ruling and the board that gave it. A firm that describes itself as offering halal finance without naming a supervisory board has told you nothing you can check.
Common questions
- Is car finance haram?
- Conventional car finance charges interest, which is the objection. Whether a particular alternative structure is acceptable is a question for your own scholarly authority, and this page does not answer it for you.
- Is PCP halal?
- A conventional PCP is a regulated hire purchase agreement with interest, so it raises the same objection as any other interest bearing product. Ijara arrangements are structured to avoid it, and providers publish their own rulings.
- Islamic car finance UK: are the providers regulated?
- Firms offering consumer credit in the UK have to be authorised by the Financial Conduct Authority whatever the structure, so check the firm on the Financial Services Register before committing to anything.
- Is the total cost lower?
- Not usually. The provider still has capital tied up in the car and prices for it, so the total payable is comparable to conventional finance. The distinction being bought is the structure, not a discount.
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Sources
Cite or embed this figure
The median advertised price of a single full car check in the GB car check market was £14.99 in August 2026, across 2 verified vendor product pages recorded in KnownVehicle Car Check Price Index.
Cite as: "KnownVehicle Car Check Price Index", updated 2026-08-26, https://knownvehicle.com/finance/halal-car-finance/.