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6 Tips For Buying a New Car in the UAE

Buying a new car in the UAE can be hard, especially if you’ve never been through the process before.

With around 60 different brands to choose from in the UAE and recent Facebook research revealing that most people only consider 3 brands to begin with it can be hard to know whether or not you’re making the right decision.

The used car market is a great place to look if you want to get the most bang for your buck, but there are a number of uncertainties and pitfalls which can be challenging to navigate (Read our article on how buying a new car can sometimes be cheaper than used).

The best way to avoid the uncertainties of the used car market is to buy new – but how affordable is it, and what about depreciation?

Read on to discover our 6 tips for buying a new car in the UAE.

Tip 1 for Buying a New Car in the UAE

Decide on what’s most important to you – are you looking for the height and safety of a large SUV? Or perhaps the comfort and style of a luxury sedan?

Deciding on exactly what you want your next new car to have when buying a new car in the UAE allows you to start defining your choices.

Our handy search feature allows you to choose all of the things that are most important to you to help start your research.


 

Tip 2 for Buying a New Car in the UAE

Just because a car matches your needs doesn’t mean that you will be happy with it. Once you have narrowed your search down to a few cars head out to the dealerships and experience the car in the metal.

Sit inside, adjust the seat, think about how you will use the car on a daily basis. Are the cup holders large enough? Does it have handy storage compartments? How’s the visibility from your seat?

Most people will decide fairly quickly once they sit in a car if it’s right for them or not. A test drive will help as well, and most dealerships are more than happy to arrange this for you. Try and take test drives for different cars on the same day to allow you to more easily compare how you feel in each one.

We can help with the test drive process and even bring cars to your home or office for you to test drive as part of our Simply Concierge service.


 

Tip 3 for Buying a New Car in the UAE

A lot of new car purchases these days are made on finance. With low interest rates this can be an excellent way of levelling up to the perfect car for your lifestyle. Knowing what to expect before beginning the finance process can help ensure you give yourself the best chance of approval.

  • Some banks have a minimum salary requirement of around 15,000 Dhs per month, and require you to have been with your company for at least 3 months. While this doesn’t apply to all lenders you should be prepared to call around if you fall below these thresholds.
  • Your DBR (Debt Burdon Ratio) is important. In simple terms this is the amount of debt exposure you have, relative to your salary. Your debt (such as personal loan repayments, mortgage repayments, etc.) should not exceed 50% of your salary each month.
  • 5% of your credit card limit will be counted as part of your DBR. This means if you have a credit card limit of 100,000 Dhs then 5,000 Dhs will be added to any other monthly repayments you have to calculate your DBR. If your credit card limit will put you over the 50% threshold then you can ask your bank to reduce your limit.

 

Tip 4 for Buying a New Car in the UAE

With new car sales in a bit of a slump at the moment dealerships are eager to sell as many cars as possible. Always ask what kind of deal the company is able to offer you to buy one of their cars instead of the competition.

They may not be able to take any money off the cost of the car but can possibly throw in extras such as extended servicing packages, free window tinting, or other products that add value to your purchase.

The dealership may offer you the choice of either a cash discount or an extended servicing package. Don’t be afraid to ask for the value of the servicing package and details of the servicing schedule so that you can make an informed decision.

If you’re not comfortable negotiating yourself then take a friend or family member who is more willing to negotiate on your behalf, and make sure to ask if they are expecting any sales or promotions to begin in the near future, or if they are selling any previous year models at a discount.

We're happy to negotiate on your behalf as part of our Simply Concierge service, check it out here.


 

Tip 5 for Buying a New Car in the UAE

With a few exceptions most cars will depreciate the moment you drive them out of the showroom. However, the rate of depreciation varies wildly from car to car, and is impacted by a number of factors – some of which mean that deprecation may not be as much of a concern as you might think.

Generally speaking, the cheaper the car is new, the less you will lose on depreciation. New cars in the 30,000 – 100,000 Dhs price range represent excellent value as a 20% depreciation loss doesn’t translate to a huge amount of cash. When this smaller loss is compared to the benefits you receive from owning a new car (such as warranty & service packages, and freebies such as insurance & registration) then a new car purchase becomes a lot more viable relative to buying used.

Most cars come with different levels of equipment - what we refer to as trim levels. There may be a big difference in the price of a car with basic equipment compared to the version with all the bells & whistles. Our advice is to buy the one you need. Paying a little more to get features you will use every day is unlikely to be something you will regret, but don’t fall into the trap of thinking that buying the top-spec model will significantly improve your resale – it won’t.

The used car market doesn’t often identify the differences between each trim level very well, so while it may be easier to sell the top spec version, you won’t necessarily receive much more money for it than someone selling a low-mid spec version of the same car. See a real-world example below.

  Low Spec Mid Spec High Spec
New Price 75,000 90,000 115,000
Used Market Price (2 Years Old) 60,000 63,000 68,000
Depreciation Loss 20% 30% 41%

 

Tip 6 for Buying a New Car in the UAE

One of the most important questions to ask yourself when buying a new car is, “How long do I intend on owning this car for?”. Combined with that, you need to consider what level of servicing costs you’re prepared to pay for.

Once you have made those decisions you should pay attention to the service contracts being offered (or not) by the dealerships to help you figure out how much you may need to pay in the coming years for servicing and maintenance.

If you’re only planning on owning a car for a couple of years and the vehicles you’re looking at come with a 2-year service contract then your cost of ownership over those 2 years will be negligible.

Conversely, if you’re planning on owning the car for 5 years and only have a 2-year service contract then the long-term cost of servicing is far more important.

As a general rule, European cars will be the most expensive to service and maintain in the UAE, followed by American cars, then Japanese cars, with Korean and Chinese brands being the cheapest to maintain.

The automotive industry in the UAE is hugely varied with more brands available than most other countries in the world.

Follow our tips and you'll be on the right path to find your ideal car.

Does it all sound like too much hassle? Check out our Simply Concierge service where we will look after the entire process for you.

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