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Nine in Ten UAE car buyers chose second-hand cars over new in 2020

By PolicyBazaar

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Studies conducted recently show that over 1,500 car buyers said that they would choose a used car over a brand-new one. Approximately 35 percent of customers bought a second-hand car instead of a new one, highlighting the rapid growth seen in the second-hand car market. If you too wish to buy a pre-owned car it is best to compare car insurance in UAE to see if it covers second-hand cars or not. 

The automobile industry in the middle east is expected to grow CAGR or Compound Annual Growth Rate of 5.12 percent in the period starting from 2018 up to 2024. There is an expectation of selling over 3.68 million units by the year 2024. But the last six years have indicated the huge growth potential of the used car market. The statistics are interesting with the addition of around 100,000 customers cumulatively in these years as well as the biggest, most popular car models getting cashed-in. The same trends have been observed in the year 2020 as well and are expected to continue over the years, giving impetus to the dream of owning a car for many. If you too wish to buy a car this year, compare car insurance in UAE to see which one offers the best coverage. 

The topmost popular brands, namely, Ford, Nissan, and Toyota have the highest selling volume of cars in the UAE in the year 2019. Nissan Altima, BMX X5, and Mitsubishi Pajero however retain the title of the most sold cars in the United Arab Emirates, with Rolls Royce Cullinan and Ferrari Pista being the top cars in the luxury car segment. You too can buy your dream car, albeit a pre-owned model at affordable rates now. Compare car insurance in UAE before you make the decision of buying a car to see which one fits perfectly in your budget. 

Why are people choosing used cars over new ones?

RTA’s (Roads and Transport Authority) data on the registered active vehicles represents that the average life span of a car on the roads of Dubai is eight years. Looking at the longevity of owning cars in the UAE, observations conclude that 28 percent Nissan, 26 percent Toyota and 30 percent Ford car users cashed-in their cars after a period of 10 years. In the luxury car segment, however, 46 percent BMW owners, 50 percent Mercedes Benz owners, and 39 percent Porsche owners cashed-in after only six years. The retained car value is increasing in the UAE with sales going higher and higher and prices rising by 4 to 10 percent each year. Thus, there has never been a more fruitful time for both the buyers and sellers of second-hand cars. You too can buy a luxury car at a price that is not over your budget. However, remember to compare car insurance in UAE to see which one offers the best premium rates for the car of your dreams. 

Moreover, the UAE has proven itself to be a unique market for cars as most people change cars in around 3 to 4 years on average as opposed to the rest of the world where people change cars every 8 to 9 years. Last year itself saw an increase in the number of people changing cars with most individuals looking for an upgrade through the second-hand car market. Your desire for a luxury car can also be fulfilled if you look into the market of second-hand cars. Compare car insurance in UAE to see if your plan covers pre-owned vehicles or not. 

Despite being more costly, these used cars are selling out faster. Compared to 2018, car dealers are selling cars 7.5 days before than they were back in 2018. Privately owned cars too showed similar trends by being sold in 17.8 days faster than 2018. Research suggests that this boost to the second-hand cars market is due to the drop seen in the depreciation rate of these cars, a movement that the automotive industry in the UAE has not seen previously. This trend is favourable for those looking to delve into the market of pre-owned cars. Look carefully and compare car insurance in UAE before you decide which car is best suited for you. 

Apart from this, the cars in the country are getting older. This means that residents are holding onto their cars longer than before. They choose to invest in repairs and maintenance rather than trading them in for a newer car model. Added to this, the reduced supplies of new cars due to massive reduction in car sales in the past two to three years, measuring up to a 50 percent decrease, has increased the demand for second hand cars. This demand has also increased the prices of used cars, making them an alluring market for sellers as well. 

Furthermore, data shows that consumers are making the decision to opt for a used car not on the basis of the total ticket price of the car but their buying decisions are influenced by the amount they can afford to pay every month, looking for a price that is not heavy on their budget. Compare car insurance in UAE to make the wisest decision that does not burn a hole in your pocket.

The impact of this trend:

Experts suggest that due to this attraction towards buying used cars, new cars will see a drop in prices by 15 to 30 percent. As a result, there is a certain kind of optimism surrounding the market for used cars in the coming years as these cars are not expected to depreciate as fast as they did in the past. Making the dreams of owning a better car a reality for many. Just remember to compare car insurance in UAE to choose a plan that is most suited to your needs. 

The changes seen in the automobile industry of the UAE are ringing in good news for the market of pre-owned cars. There has been a demand for price reductions for a very long time and now that the market has reached stability in terms of the demand of new cars, the car dealers who trade in used cars have an opportunity to have better control over the car prices. If done sensibly, this will have a positive impact on the market for new cars, allowing them to control their prices as well. Moreover, this is good news even for the buyers who are scared of losing money when they re-sell their cars. 

Things to keep in mind before buying a used car in UAE:

For some people, being able to afford a new car is still a dream. Yes, a new car can solve a lot of your issues like convenient conveyance, no more worries about your vehicle breaking down, even the weather is no longer your enemy, and so on. But fitting a brand- new car in your budget can be a not so easy task for everybody, especially the beginners who cannot afford something so expensive. While some car dealers in the UAE do have the option of economy cars, starting at AED 50,000 and above, it is still quite a lot for many individuals. 

As a consequence, many people opt for pre-owned cars since they are cheaper. Statistics indicate that around 78.1 percent of UAE’s residents would actually consider buying a second-hand vehicle. Just compare car insurance in UAE before you narrow down on which car to buy. 

As appealing as the idea of owning a used car sounds, there are certain disadvantages associated with them. Primary among these is the condition that the vehicle is in and how well it was maintained by its previous owner. Thus, there are some things one needs to be vary of before buying a pre-owned car:

  • Get the vehicle inspected by a mechanic to know the exact condition of the vehicle
  • Make sure that the car’s VIN number, engine, etc match with the documents provided to you
  • Do some research on the car’s market value to arrive at its actual resale cost
  • Check if there are any dents, scratches, or any damage that can or cannot be repaired
  • Check the tires and breaks. They should not be worn out and must be from the same brand
  • Check for rusted parts and see if the engine leaks fluid
  • Check the interiors of the car including the seats, radio, etc
  • Notice if the car is making any strange sounds
  • Check if the gears are changing smoothly
  • For the ultimate test, take the car for a test drive to see if you are comfortable driving it

Keep these points in mind when you go to buy a second-hand car and at the same time don’t forget to compare car insurance in UAE to see which plan gives maximum coverage to your used-car.

Given underneath is a list of the most cashed-in car brands and car models in the UAE in the last year:

TOP CAR BRANDS

TOP CAR MODELS

Toyota

Pajero

Nissan

Altima

Ford

XS

Mitsubishi 

Sportage

BMW 

Prado

Volkswagen 

Patrol

Honda

Corolla

Audi 

C Class

Mercedes Benz

Civic

Land Rover

Accord

 Pick one of these if you are thinking about buying a car for you and your family. But before you do that, compare car insurance in UAE to arrive at the car that is most affordable for you.

The Bottom Line

As the 2020 trends showed a great boost to the market of second-hand cars with the top car brands and the most popular car models being cashed in, this momentum is bound to continue even in the year 2021. If owning a car was your dream, it could become a reality soon and that too at an affordable price!