Cars in the UAE: to buy or not to buy?

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  • The pros and cons of rental and ownership.
  • A revolving door of expats propels the UAE’s strong second-hand car market.

If you’re living in the UAE, it’s likely that you’ve considered the financial viabilities of having your own car to drive around town. But does it make more sense to splash out on your own vehicle, or simply rent one out on a shorter-term basis?

Whichever option you’re leaning towards, there are myriad factors to consider. First and foremost, you need a residence visa to own a car here – if you don’t have one, renting is your only avenue.

Vehicle ownership is reasonably straightforward in the UAE compared to other countries. Both new and second-hand motors cost less than they do in, for example, the United Kingdom. Combined with the low cost of petrol and maintenance, this can prove a major draw for prospective buyers.

The big spend

If you’ve decided to purchase a new car, festive periods in the UAE can be a great time for bargains. Ramadan typically sees dealerships across the country offering alluring deals such as knock-down prices, five years’ free servicing and even smart TVs.

Don’t get too carried away though – budgeting is crucial when buying a vehicle, and it’s of paramount importance that you select an option which best suits your needs. After all, a shiny two-seater sports car won’t come in much use when it’s time to do the school run.

The depreciation of new cars can be swift and brutal too; they lose between 20 and 30% of their value in their first year, and almost 50% after two years of usage.

However, this can work in your favor as well; buying second-hand can be a great compromise if you’d like your own set of wheels, but don’t want to break the bank in doing so.

The UAE’s high turnover of expats means that there are always bargains to be found on used cars, and someone leaving the country soon will be more likely to accept a lower price. Be sure to check the vehicle’s service history and whether it’s built to GCC specifications, which include rust protection and an enhanced filtration system to deal with dust and sand. If your car isn’t GCC-spec, it may be a lot harder to get it insured, so this is a vital matter to research. Finally, get a mechanic to give the vehicle a thorough once-over before you part with your cash.

Second-hand car auctions and pre-owned car dealerships are further options for those who wish to explore the market. Be aware that certain brands retain better resale value than others – a recent study showed that Toyota and Nissan are the best-selling cars in the UAE’s used car sector.

For rent

When it comes to renting a car, perhaps the major downside is that – much like renting an apartment – every dirham that you spend goes straight into someone else’s pocket, as opposed to building your investment. However, there can be definite upsides in choosing this route as well.

For instance, when you rent a car, the scope for nasty surprises narrows enormously. You simply pay a fixed amount of money every month to use the motor, without the need for registration, maintenance, loans and so on. If your vehicle breaks down suddenly, it will be replaced quickly and free of charge. If you hit financial problems, you can simply stop renting.

Take note though that the driver of a rented car is still responsible for fuel costs, Salik charges, traffic fines and any damage to the vehicle – with the company holding a deposit to cover these costs.

If you anticipate staying in the UAE for a relatively brief period, or you prefer keeping your costs fixed and predictable, car rental may well be the better option for you. However, if you expect to be using the country’s roads for many years to come, owning your own vehicle may prove to be the wiser long-term investment.

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Aqeed is an insurance technology company that aims to make insurance simple, transparent, and accessible. We are on a mission to help you become better at everything related to insurance. From the decisions you make to the choices you take, you are In Sure Hands.

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