Why Are Cars Cheaper In Dubai, UAE? (Not What You Think!)

Although Dubai’s public transport system is expanding, they are still not entirely at the point where owning a car is unnecessary. And if you’re an expat, you will notice that the prices of vehicles in Dubai are lower here than in the UK or USA.

And the beauty of the situation is that Dubai is an oil-rich emirate, making petrol/gas prices quite affordable. But why are the vehicles cheaper in Dubai?

Cars are cheaper in Dubai because the 2008 financial crisis played a role in changing the preference for buying new cars to favoring used vehicles, so car companies began to offer huge discounts on cars.

High salaries and higher supply than demand contribute to cheaper car prices.

In Dubai, cars are not merely modes of transportation. They are also status symbols, and you will find every luxury vehicle you can dream of in the streets. And in the car dealerships.

While many purchase luxury cars, not all can maintain their payments and put them up for resale. For numerous reasons, there is a glut of cars on the market, making new and used vehicles more affordable.

Why Are Cars Cheaper In Dubai?

Cars are indeed cheaper in Dubai, and the reasons for this vary.

The global economic crash, attractive deals for both the new and used markets, quick devaluation of the vehicles, and the high salaries all contributed to the affordable prices of cars.

The 2008 Market Crash Caused Car Prices To Drop In Dubai

Dubai has always been home to the most expensive and luxurious cars. When an automotive company manufactured new and exotic models, they would launch them first in Dubai. Many automotive giants still do this.

Until the 2008 financial crash, most of the Dubai population preferred buying new cars. Dubai itself is a symbol of wealth and status, and the trend has always been to drive the most expensive luxury car possible.

But when the recession hit, many people could not maintain the payments on their expensive vehicles. They either sold their cars for a lot less than they were worth or abandoned them before fleeing the country.

In challenging economic times, such as the 2008 financial crash, many expats lost their jobs, preventing them from covering their costs. They were not given much time to find work and repay their debts.

When time started running out, they would ditch the cars before leaving, as defaulting on payments  can earn you jail time in Dubai.

The High Turnover In Expats And Cars In Dubai

 For decades Dubai has been the land of milk and honey to many outsiders. The salaries are high, and people don’t pay income tax, leaving them with a higher disposable income. What are they to do then but to dispose of it?

The wealth and high-end lifestyle appeal to foreign nationals and their white-collar positions usually pay well, allowing them to afford even luxury cars. Most expats buy vehicles in Dubai.

Although the public transportation system is improving, many don’t find it suitable for getting to work and other places timeously. Consequently, they purchase their own vehicles.

But these workers don’t usually stay in the UAE for long periods and will often sell their vehicles at reduced rates after their sometimes short terms of employment. This has inspired a sizeable used-car culture in Dubai.

Cars Depreciate Quickly In Dubai

Statistics show that vehicles in the UAE depreciate by 20-30% in the first year and 15-20% annually afterward. The rapid influx and exit of foreign nationals drive this depreciation.

The rapid depreciation means that when vehicles are resold, their prices are much lower.

The Shift From New To Used Vehicles In Dubai

Traditionally consumers had a preference for new vehicles. Apart from the status of owning a brand new (and often expensive) car, the dealers made the purchase process easy for the buyer.

They would facilitate any administration, including registration and insurance. Many people also loved the possibility of customizing their new ride.

Now many used-car dealerships handle the paperwork the same way that was only available for new cars. The only reason some folk may stick to buying a new vehicle is if they want it customized to their specifications.

With the escalating cost of living, many people purchase their vehicles second-hand. They are very affordable, allowing buyers the benefit of owning a more luxurious car than they could typically afford.

Some dealers also offer a 0% deposit on the vehicle, which is a big drawcard for buyers.

Sellers trying to get rid of cars older than ten years old often have to sell them privately. Some banks have a cut-off age for vehicles they are prepared to finance.

This may cause many people to sell their cars via dealers to avoid the cut-off date preventing buyers from getting finance. Selling an older car out of hand sometimes forces the owner to drop the price.

Some Abandoned Vehicles Get Refurbished And Sold In Dubai

As mentioned before, many people abandon their vehicles when they can no longer make payments for them. Some abandoned cars are impounded, refurbished, and resold.

Many of these cars will have a very low price tag. If they have been standing in the desert sun for too long, they may have more damage than is worth fixing. So a mechanic should always accompany you to inspect these vehicles.

Cars With USA Specifications Are Cheaper In Dubai

Cars with American specifications are not designed to survive the harsh Dubai climate and are often sold for lower prices.

The paint will often peel off from the extreme heat, and the air conditioners may struggle to keep the vehicle cool during the summer. The air intake filter system is not made to prevent dust from getting into the engine, which can cause damage.

Fuel Is Much Cheaper In Dubai

When you buy a car, you soon realize that the purchase price is not the end of the expenses. But UAE is an oil-rich country, allowing local drivers the benefit of low fuel costs. Drivers don’t need to worry about driving fuel-efficient cars.

Many other expenses come along with the lower cost of cars in Dubai, though.

The prices of licenses, registration, fines, and parking are much higher here, so a buyer still needs to weigh up whether it is worth buying a new or used car or whether renting a vehicle or using public transport would be better options.

Buying is certainly more tempting to anyone needing transport because there are so many cars available to suit every pocket. And if you have the benefit of a well-paying job, you may even have your pick of affordable luxury cars.


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