We have the option of buying a car on installments in which the sellers say there is a service charge, something extra we must pay every month. Is this allowed in Islamic Legislation?
You may buy it if the merchant owns the car (ie. the car is his property) even though he gives a higher price for installments. For example, the cash price is 55555 and the installment price is 77777.
Also it will be permissible as long as the merchant doesn’t say, for example, I will charge you 15 percent every month if you pay by installments.