Why Are Used Cars So Cheap in the UAE and Expensive in Other Countries?

It is common knowledge that used cars are so cheap in the UAE than they are in the majority of other countries. It's one of the inquiries that people have the most about Dubai, Abu Dhabi, and the UAE as a whole. But the underlying query is: why are automobiles so inexpensive in the UAE?

The UAE has one of the most distinctive automotive markets in the world due to the vast diversity of vehicles for sale there. But these automobiles' prices also contribute to their individuality. According to a survey, a midsize car can be purchased in the UAE for under 80,000 AED, while a comparable vehicle in Singapore would cost about 30,000 AED. That is a significant distinction.

What factors specifically make cars in the United Arab Emirates so inexpensive? Find out by reading on.

Low-Interest Rates| Used Cars So Cheap in the UAE!

According to studies, an auto loan is utilized to purchase about 40% of all used cars and about 80% of all new cars worldwide. This is true even if the majority of nations have higher interest rates. The UAE, however, operates a little differently. Car loans with interest rates ranging from 2.29 to 4.42 percent are accessible.

This significantly lowers the cost of car ownership, making it simpler for UAE citizens to own a vehicle. The majority of purchasers are really closer to their ideal car than they initially believed was achievable thanks to the lower interest rate and the easy availability of financing options.

Higher Rate of Relocation!

The nature and culture of the Emirates, including Dubai and Abu Dhabi, are lively and energetic. People want to move to these cities from all over the world as a result. The UAE is home to expats from more than 200 nations, and many of them will end up purchasing a car while living there.

Some of these expats depart the UAE after a few years, while others do so after a number of decades. The truth is that they end up selling a car(s) they owned when they do leave the country. In the UAE, the rate of repatriation and expatriation is very high, and as a result, so are the rates of purchasing and selling cars. As a result, total car prices decrease.

Minimal Taxes!

In many places of the world, cars are among the goods with the highest tax rates. In comparison to the US, where the maximum car tax rate is 8.25 percent, the EU, where the maximum is 27 percent, India, where the maximum is 28 percent, and Singapore, where the maximum is 320 percent, Many nations, like Singapore, charge taxes based on the value of the vehicle, and the rates are always greater for expensive items.

However, in the UAE, the VAT rate for automobiles is merely 5%. Therefore, you simply need to pay 5% VAT whether you're purchasing a Nissan Tiida or a Range Rover Autobiography. This greatly lowers the price of buying an automobile.

A Large Number Of Abandoned Cars!

In numerous locations throughout the UAE, one must have seen videos and pictures of abandoned cars accumulating dust. During the 2008–2010 global financial crisis, many cars, both expensive and common, were abandoned for a variety of reasons. The UAE is today among the most successful nations in the world, the financial crisis has long since passed.

A few abandoned vehicles, though, are still being refurbished and placed back on the used auto market. A lot of these even show up at auctions for incredibly low prices. You might be fortunate enough to obtain the car of your dreams. But before you buy the car, we advise that you get it thoroughly inspected.

Relatively Higher Maintenance Costs!

It goes without saying that the UAE has very high summertime temperatures. It is a desert nation after all. As a result, some components of your car will inevitably experience greater wear and tear than typical. Rubber components are a good example of this. This indicates that tire replacement is a little more frequent. The sole component of car ownership in the UAE that is on par with, or somewhat more expensive than, some other nations and has the potential to lower car prices is this one.

Cars last a long time because of excellent road infrastructure and excellent serviceability. In reality, one can only easily find vehicles with hundreds of thousands of miles on them in the United Arab Emirates.

Surplus Supply of Cars!

The UAE had 3.8 million inhabitants in 2003. At this time, in the middle of 2023, there are 9.5 million people living there. The number of car buyers also increased dramatically along with the sharp rise in residents. Despite a significant rise in sales, there are both large and small cars in every car store in Dubai and Abu Dhabi.

Both the supply and the demand for cars are growing. There is an excess supply of vehicles despite the fact that both private and OEM dealerships are doing well and seeing an increase in sales. This excess supply contributes to cheap car pricing.

Lower Fuel Prices!

The cost of an automobile is not directly impacted by gasoline costs. It does, however, have a side effect. Cheaper fuel costs result in cheaper ownership and operating expenses, which is why they are one of the reasons listed above. The UAE is the 18th least costly country in the world to purchase fuel, with rates starting at AED 2.97 per liter. View the current diesel and gasoline prices in the UAE.

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