Why Used Cars Are Inexpensive In UAE
The UAE and its people are often associated with excessive spending. The reason is that luxury and aesthetics are always a top priority. It is reflected throughout the UAE, thus giving rise to this impression. The automobile market is no exception either. You can find all types of vehicles, including limited editions, driving around the UAE. We are all familiar with the supercars that the UAE police use and gold-plated supercars.
Nevertheless, there is a growing used car market in the UAE. Emiratis and expatriates are increasingly buying used cars instead of new ones. While many people may find it surprising, it is not the case. There is a logical explanation behind this trend, and today's article will highlight it.
Used Cars & UAE
As you can guess from the title, used vehicles are quite inexpensive throughout the UAE. People prefer them over new ones, which are much costlier nowadays. Many people think that the new prices do not justify the value. On top of it, the coronavirus has reduced the buying capacity of people in the UAE and worldwide. Hence, buying used vehicles is a wise decision from a financial perspective.
On top of it all, when you buy a new vehicle, it instantly depreciates the moment you take it out of the showroom. A brand-new car has a depreciation rate between 11%-15% per year in the UAE. It is a significant factor why people are hesitant to buy a new car and go for a used one. The cost of a used car in the UAE is almost half of a new car.
But what makes used cars inexpensive in the UAE? Let us see.
Reasons Behind UAE’s Inexpensive Used Car Market
The reasons include:
Demand & Supply
It is simple economics that the prices fall when supply outstrips demand. The UAE has a huge used car market. Previously, people hesitated to buy old vehicles as they considered them untrustworthy. It is no longer the case now. Many people prefer to buy a used car as it is cost-efficient and does not require any waiting time. To remain competitive in the used car market, many companies are willing to provide perks such as a warranty and contract of service. As the supply of used cars outnumbers the demand, prices are significantly lower.
Dubai Port
One reason used cars are less expensive is the Dubai port. The UAE is the preferred choice for imported vehicles due to its port. A bulk of imported cars in the Middle East go via the Dubai port. It is the reason behind the rise of American manufactured cars in Dubai as people buy them from auctions or import them directly through well-known companies.
Financial Crisis
The cars were relatively expensive in the UAE before the financial crisis of 2008. People preferred buying new cars as there was not much difference in the prices of new and used vehicles. As the financial crisis unfolded, many people who owned cars were forced to abandon them as they could not afford to pay the installments.
If an individual did not pay the installment on time, they would be fined heavily or serve a jail term as well. To avoid this, people abandoned their vehicles and left the country. It is the reason behind abandoned luxury cars in Dubai. As a result of this, the prices of used vehicles are low in UAE compared to other parts of the world.
How to Buy a Used Car in the UAE?
If you are looking for a used car in the UAE, it is recommended that you don't go for an automobile that is older than ten years. The reason is that many banks in the UAE won't provide a loan for a car that is more than ten years old. You should also check with the banks before actually buying a used car whether they finance that car.
Moreover, some sellers of pre-owned vehicles usually accept full payment and don’t sell on down payments. So, before you waste time in finding the perfect car, make sure to ask the seller what sort of payment options they accept. Buying a used car can be an uphill task as there are different prices quoted for a particular vehicle by different sellers. Ensure that you get in touch with someone whose price is most suitable for you and get the car inspected by an expert.
Wrap Up
It concludes today’s article. If you have any questions or suggestions in your mind, let us know. Once again, we would like to reiterate that you must get the used car checked by an expert before finalizing the purchase. It will help you avoid issues and save your hard-earned money.