Assalaamu alaykum. A year ago, my brother made a deal to purchase a second-hand car (about 40% was paid from my account). He finalized the deal with the owner and paid an advance on the money and took the car to our home. Then, on another day, my brother was ready to pay the remaining money, but the seller said that he want to take the car back. My brother told me that he could not take it back as the deal was finalized, but he kept on insisting to return the car and involved some other people. My brother told him that he could not take the same amount of money back (that was given in advance) but that he had to give about twice what was given in advance to take the car back. So he paid back some money (I think near double). Was it halal to take twice the amount of money to give back the car? My brother used that money in the purchase of another car. Is it ok for me to drive that car? (I paid about 40% of its total cost.) Kindly clarify. What should I do? May Allah reward you.

All perfect praise be to Allah, the Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallahu ‘alayhi wa sallam, is His slave and Messenger. 

If the sale was conducted without the option to cancel the sale (known as Khiyaar; the option whereby the parties have the right to withdraw from a contract), then the sale becomes binding on both the seller and the buyer and neither of them has the right to cancel it except with the consent of the other party. This is known as Iqaalah (reversal of a sale, or consenting to let the buyer cancel the sale and get his money back).

It is recommended for the Muslim to accept to grant his Muslim brother Iqaalah if he asked for it. Abu Hurayrah, may Allah be pleased with him, narrated that the Prophet, sallallahu ‘alayhi wa sallam, said, “Whoever agrees to cancel a sale with a Muslim, Allah will cancel his slip (on the Day of Resurrection).” [Abu Daawood and others]

Scholars held different opinions on cancelling the sale in return for an extra payment beyond the original price. The majority of the scholars held that the Iqaalah means the annulment of the contract and that it is not valid to demand an extra payment for it. However, Abu Yoosuf and Muhammad ibn Al-Hasan (senior Hanafi scholars) held that it is allowable provided that it is done with the mutual consent of the contracting parties. This was also one of the opinions reported from Imaam Ahmad and the famous view of the Maaliki school.

Hence, there is no harm in what your brother did and he may benefit from the money which he took and he bears no sin for that.

Even according to the scholarly view that taking extra money is forbidden, you bear no sin for it because you did not help him in doing it. If he bought a car or otherwise with the money which he earned from this transaction, it is permissible for you to use it if he gives you permission.

Allah knows best.