Reference: I’laam al-Mu’aasireen bi-Fataawa Ibn ‘Uthaymeen – Page 401
Question: What is your opinion regarding the one who buys a new car every time the latest model appears [on the market], even if it is beyond his financial means?
Response: I am of the opinion that this is not sensible, that you buy a car beyond your means in order to boast to others or to remain abreast of the latest cars every time a new model appears [on the market]. [So] you go and buy it and sell your previous [car] at a loss; No doubt this is a mistake, foolishness! If you are in need of a car, then buy one according to your means. It has been said:
Extend your stride according to your covering (i.e. how much you are covered by clothing)
…this is because if you extended it beyond your covering then you will catch a cold!
So we say to our brothers, compose yourselves; Don’t buy cars except those which are necessary, and don’t buy cars except those which are within your means.
As for monthly payments [hire purchase], then no doubt they are regarded as a loan.