Halal Car Finance UK: Everything You Need to Know in 2025

What's Halal Car Finance, Anyway?

Let’s break it down like your uncle at a wedding after too much biryani. Halal car finance is a way of funding your vehicle without interest (riba) or exploitative contracts. That’s right, no hidden traps, no dodgy loopholes, and no soul-selling clauses in 6pt font.
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At Ayan, we use Ijara wa Iqtina to provide halal car finance, but other methods such as Murabaha are also used, read more about them here. 
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The principle is as follows: Instead of a lender charging you interest on money you borrow, a halal car finance provider like Ayan Capital buys the car on your behalf, rents it to you whilst they are owners, and then transfers ownership once payments are complete. This isn’t just a nice idea, it’s based on solid Islamic finance principles.
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Surah Al-Baqara, verse 275: “That is because they say, “Trade is no different than interest.” But Allah has permitted trading and forbidden interest.”
 

Whilst the form of Islamic car finance can vary, the principle stays the same. The most important difference between Islamic finance and conventional finance, is that Islamic finance has to be based on the real economy, real trade, real goods or services being provided/financed. 

According to AAOIFI: This Is Serious Business

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), basically the FCA of halal finance, lays down the shariah standards to make sure everything’s legit. We’re not making this stuff up in a WhatsApp group chat.
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Under AAOIFI’s standards, the Ijara wa Iqtina contract (that’s Arabic for rent and acquisition. It is also known as Ijara Muntahia Bittamleek, which means rent ending in ownership) must meet four golden rules:
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1. ✅ Ownership stays with the financier until final payment.
   We take the ownership risk, you take the usage risk. If, for example, the car is written off due to a third party's fault, Ayan and the insurer handle it – you are not liable for anything extra.
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2. ✅ No interest (riba) involved… ever.
   We do not give you money. We buy the car and rent it to you. Thus, you pay a clear, agreed lease amount. At the end of the term, we transfer the ownership of the car to you under a separate contract.
   
   
3. ✅ Transparency is key.
   All terms must be spelled out in your agreements from day one. No sneak attacks.
   
   
4. ✅ No penalties. For anything.
   We will never charge you extra for paying early, missing a payment, or settling the agreement before the end of term. Life happens, and we believe finance should be flexible, not punitive.

In short: it’s halal, it’s honest, and it’s regulated under AAOIFI guidance.
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Many countries have made it mandatory for Islamic finance institutions to abide by AAOIFI standards, such as Bahrain, Qatar, Jordan, Syria, Sudan, Oman, and Yemen, as well as others. It is also used voluntarily in many countries where it isn’t mandatory, such as Indonesia, Malaysia, Dubai, Brunei, and others.
  

Thankfully for those of you looking for a halal car finance company which is certified under these standards, look no further!
 

You can find Ayan’s shariah compliance certificate here, provided by Mufti Muhammad Ibrahim Essa, CEO of the Alhamd Shariah Advisory.
 

The bottom line is this: providing Islamic finance is a responsibility. We do not take it lightly. May Allah always guide us on the right path.

Is It Just for Muslims?

Absolutely not! Halal finance is open to everyone, regardless of religion, background, or whether you put ketchup on biryani (although we’d prefer if you didn’t).
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Why? Because halal finance is built on ethical principles: transparency, fairness, trade, and zero exploitation. You don’t have to speak Arabic or own a prayer mat to benefit from a contract that doesn’t tie your finances up with small print and hidden fees.
 

Many non-Muslim clients choose halal car finance simply because they prefer an interest-free, ethical model. At Ayan, we have plenty of non-muslim clients who love the product!

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‍Who’s It For?

At Ayan Capital, we specialise in halal car finance for:
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• PCO (Private Hire) Drivers – Uber, Bolt, FreeNow and more in the UK
  
  
• PHV Licence Holders – For those with private hire vehicle plates in any council
  
  
• Black Cab Drivers – Because you can be iconic AND interest-free
  
  
• Business Owners – Fleet leasing without the financial grey area
  
  

Whether you're picking up airport runs or school runs, halal finance has your back.

But... How Do the Payments Work?

Here’s the vibe:
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1. We buy the car you choose (any car from any dealership) - like a generous older sibling.
   
   
2. You pay fixed weekly payments. Some of these weekly payments go towards rent, and some of it goes towards you paying off the car price. Think of it as us buying the car, letting you use it for an agreed weekly rental amount, whilst also letting you split the car price into affordable installments to own it one day, rather than having to pay for it all in one go.
   
   
3. Once the contract ends, ownership is transferred to you. 🎉
   
   

Simple. Stress-free. And most importantly, transparent.

There should be absolutely nothing about the contract, the finance, or anything for that matter, which you cannot ask about and get a straightforward answer to. Challenge your finance providers (it goes without being said you should do this respectfully); your feedback is important, valued, and the only way we can progress Islamic finance globally.

Is It More Expensive?

You might be surprised: not necessarily. In fact, the predictable costs and lack of interest mean you know exactly what you’re paying. No fluctuating APRs, and no maths GCSE flashbacks.
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Plus, because it's sharia-compliant, it’s designed to be ethical and balanced, not extractive or punitive.
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It should be noted, in some cases when compared to established banks, you might find your halal finance provider is more expensive. This isn’t because we want to make more profit, in fact - we literally aren’t profitable as a firm yet, in order to offer the lowest price we possibly can! We actually subsidise some of our customers, to remain competitive. In fact, because of this, we are more competitive than other traditional rent to buy lenders!
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However, the reason we might be more expensive than some established banks is that Islamic finance is relatively new to the UK. Less data = more risk = hesitant investors. In turn, Islamic finance companies such as ourselves, are charged a high cost of financing from investors, which means for us to be able to do business, for now, our prices will be higher.

Fear not, as this isn’t forever. Ayan’s goal is not only to provide halal finance, but to be more competitive and convenient than ANY alternatives. Bear with us whilst we chip away towards this goal, but also keep in mind everyone has a starting point 💚

The Halal Finance Advantage

• ✅ Interest-Free
  
  
• ✅ AAOIFI-Compliant
  
  
• ✅ Clear & Transparent Contracts
  
  
• ✅ Open to All Faiths
  
  
• ✅ Flexible Terms
  
  
• ✅ Backed by Values, Not Just Profits
  
  

Ready to Drive the Halal Way?

Whether you're Muslim, non-Muslim, Uber driver, black cab boss, or just someone tired of financial curveballs, halal car finance in the UK is a powerful, ethical alternative.
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At Ayan Capital, we’ve helped countless drivers get behind the wheel the right way—with halal, AAOIFI-compliant, interest-free car finance that puts integrity in the driver’s seat.
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Ready to roll? Start your halal car finance journey now.