Here are the Laws You Should Be Familiar with Before You Sell Your Car in The UAE

Here are the Laws You Should Be Familiar with Before You Sell Your Car in The UAE
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Are you looking to sell your car in the United Arab Emirates? If yes, then there are some laws that you should be familiar with. Conforming to the laws will ensure that you have a smooth car selling experience. When you play by the rules, your peace of mind is guaranteed. Selling your car is very easy. You can run a few Google searches to get the best price. You can just type cash your car UAE in your Google search bar and compare the various quotes by the different car buying portals.

In this article, we will cover the laws pertaining to the sale of a car in the UAE. Let’s get started.

1. The Car Selling Laws in the UAE

“What do the laws say about selling a car in the UAE?” This is the most commonly asked question, when it comes to selling a car. The rules mentioned below will help you to get some clarity.

  1. Vehicle owners must not stick any ‘for sale’ signs, stickers, adverts or sales literature inside their car windows. This is a European practice which is illegal in the United Arab Emirates. If any advertisement is found, the police will impound the vehicle.
  2. If a vehicle owner has any outstanding finance (mortgage), he/she can’t sell a car in the United Arab Emirates. The car owner must clear his/her outstanding finance (if any) before he sells his/her car.

2. Laws Concerning Banks, RTA, & Buyer

  1. As mentioned above, the car seller must clear any outstanding finance (loan/mortgage) if any. Once the finances have been repaid, then the concerned bank must inform the Roads and Transport Authority to update the loan status in their records. When the status of the loan is updated on the RTA system, the RTA will send an SMS to the car owner. Usually, this takes 1-2 business days.
  2. Putting their car through the Roads and Transport Authority test before advertising is in the good interest of the vehicle owners. It will help them detect problems (if any), so they can be rectified and a valid car test certificate is obtained from RTA. Without obtaining a valid car certificate, a car can’t be transferred to a buyer. The fee for the RTA test is AED 120. The validity of the certificate is 30 days and it can’t be used after 30 days.
  3. The car seller must be present at the time of transfer with original valid UAE driving license/Emirates ID along with a valid test certificate.
  4. Any fines/due must be cleared before selling a car.
  5. Documents required- Here are the documents that a buyer must have.
  6. A valid car insurance
  7. Emirates ID
  8. Valid UAE driving license

Note- The buyer must have originals as well as photocopies of all the documents.

  1. The buyer must either to pay or refund the seller (if he/she has already paid) the vehicle test fees (120 AED). In addition to that, the buyer must pay the registration fees (330 AED).

Keep in Mind: In case a buyer has a visa from a different emirate and the emirate in which he/she wants to register the car is different, then the buyer must own/rent a property in his home emirate and he/she needs to submit a proof of residence.

3. Seller Laws

These laws answer the question who can sell my car for me?

A. While the seller should be personally present at the Roads and Transport Authority in order to transfer a vehicle, there are a few of options that allow a third-party to sell a car on the seller’s behalf. The seller can grant an individual the power of attorney so that car can be sold on the seller’s behalf.

Keep in Mind: The process of granting power of attorney is a formal one. It needs to be organized legitimately through the court. The power of attorney isn’t restricted to only selling the car on the seller’s behalf; rather it can be used for all of his/her affairs. It is recommended that one be very careful when opting for this option.

B. A car owner can visit an authorized car showroom that writes sales agreements on the owner’s behalf. The car owner must be physically present with his/her original Emirates ID at the time of writing the sales agreement.

Note- Make sure the car is free of any outstanding finance or fines before any sale arrangements are made.

Keep in Mind: Ensure that the car showroom is trustworthy as they will be able to lawfully sell your vehicle on your behalf. It is recommended to add a clause that permits them to advertise your car on your behalf, but the choice of proceeding with the sale is yours.

4. Car Insurance Transfer Laws

In case the seller’s car insurance plan has more than 7 months left till its renewal, the policy can be transferred to the new car owner given that he/she fulfills the eligibility criteria set by the insurance company. Not all insurance providers offer the facility to transfer car insurance, ensure that your current insurance provider offers this facility. 

If a policy has 7 months or more remaining, the policyholder can also choose to cancel the insurance plan and get a refund for the remaining period. In order to avail this option, the policyholder must submit a photocopy of the new registration card from the new car owner.

5. Loan Transfer Laws

It isn’t possible to transfer a loan. The loan must be cleared in full.

Summing It Up!!!

Selling your car is not child’s play. If you want to sell your car without any complications, make sure you abide by all laws so that you don’t have to face any inconveniences later. Selling a car takes time, don’t rush and have patience. Having time on your hands will enable you to take better decisions. 

Don’t forget that it is mandatory to buy car insurance in UAE. If you are the new owner of the car, you must buy adequate insurance coverage for your car. 

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