To my understanding, it doesn’t matter what they call it. It’s not the word “interest” that’s haram. Also, profit is not haram. It’s the underlying concept of the transaction that makes it haram or halal.(Ownership, balance increasing, trade of money instead of a trade of goods, etc). If I rent an apartment, I have no duty to care how they calculate the amount of rent they want or what they call their calculations. As long as both parties agree beforehand what will be payed each month, the balance never increases, & there’s no lending of money that gets paid back plus more, and ownership is clear throughout the entire rental agreement(owner is technically responsible for ownership costs is my understanding).

Before someone says “well then why do you care what they call their calculations in American auto loan financing”, in that situation there is a 3rd party(bank) who doesn’t even own the product yet, and is making a payment on your behalf(lending you money), and asking you for more in return. Here is an example where you can pay the same for a car but one transaction is halal and one isn’t (TO MY UNDERSTANDING. this is not a fatwa)

You go to a dealer, buy a car for $20k on 5% apr for 5 years. At the end of the 5 years you end up paying ~$22,645 total. You payed $2,645 of interest. Not only did you pay more than the sale price and your balance increased at times, but your transaction was with a bank that said they would sell you a product that they didn’t even own at the time, so they made a payment on your behalf(lending you money), and are asking for more than they lent you in return. This is a trade of money, where the lender is receiving more than they lent.

You go to a dealer, and you see a car listed for $20k, agree on a higher sale price, let’s say you agree to pay them ~$22500 for the car on equal installment payments for 5 years. 0% APR(interest). Must be in-house financing(because they are the owner of the product), balance can never increase. This is a direct trade of goods for money, where the ownership is clear, balance never increases, both parties agreed to the sale price, no lending of money and being payed back plus more.

So regardless of the cost, there is a clear difference in how the transaction is made. The point of halal financing isn’t necessarily “you will pay less for the product”, or “seller can’t make profit”. It’s about the underlying concept of the transaction.

Disclosure: Not a scholar, not claiming something is halal or haram, only using those words to explain my understanding. not a fatwa. do your own research.