A:
If the reality is as you have mentioned,
charging an interest of 2% in case of default on payment of the due installment falls under Riba (usury/interest) which is prohibited according to the Qur'an, Sunnah and consensus of scholars. Accordingly, it is impermissible for the Arab Car Agency to take it. Thus, such a usurious transaction is prohibited and illegal. Allah (Exalted be He) said:
...whereas Allâh has permitted trading and forbidden Ribâ (usury).
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.
Quran
Quran
Quran Reciters
fiqh
Doctrine and Tawhid
Know about Islam
Charging an interest...
