Can you really afford to buy a car in the UAE?

Zach Holz says the heavy costs involved in ownership may outweigh the benefits of purchasing your own motor

DUBAI , UNITED ARAB EMIRATES , JULY 10 – 2018 :- Car dealer checking the cars before the start of live car auction held at Pioneer Auctions in Umm Ramool area near the Dubai International Airport in Dubai. Pioneer Auctions is the leading live auction house in Dubai and has been holding car & vehicle auctions in the UAE for over 10 years. Over that time they have sold over 11,000 cars at live auction, from Ferraris to Fords, Classics to exotics. Pioneer auction also works with Dubai Customs, Dubai Police and other companies. ( Pawan Singh / The National )  For Photo Project
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For most UAE residents, their two biggest expenses are their car and house. This makes sense, as they are two of the largest single purchases you can make, plus they have many repeating costs as well.

For cars, the monthly payment is only the beginning. You still have petrol, insurance, maintenance, repairs, registration and parking to consider, as well as any speeding or parking fines. Plus the UAE has a huge luxury car culture, with every other vehicle on the road either a BMW, Mercedes or Rolls-Royce. This means many residents move here and then buy the fancy car they've always dreamed of because they can finally afford it, but there are huge financial consequences to that decision.

If you don't believe me, track your spending on your car for a month or two.  Apps such as Spending tracker are free and take about 10 seconds to use after you make a purchase. You can only make a rational decision on how much something costs if you have all the information, and without knowing the actual amount you spend, you don't have that information.

For me, I average about Dh2,000 a month on my car, and I'm only driving a 2016 Nissan. If you're driving a luxury brand, I'll bet you easily double or triple that number.  If you're thinking about purchasing a high-end motor, be aware of how much of your salary it will eat up.  Can you afford to spend an extra Dh4,000 to Dh6,000 on transportation?  Could that money go somewhere else that benefits you, such as invested into stocks or real estate, assets that generate wealth instead of draining it?


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For the first eight months of living in Dubai, I did not own a car.  I was lucky that my apartment was just a two-minute walk away from my workplace. I took the Metro everywhere else, as I live near a stop as well.  For the rare occasions I needed it, I took a taxi.  Not only did I spend a fifth of what I now spend on transportation, I also lost weight because of my less sedentary life style.  This is consistent with findings from the American Heart Association that shows people who consistently take public transportation have lower rates of obesity, heart disease, diabetes, and unhealthy blood pressure.

Then a friend of mine was moving and needed to sell her car. I was getting more gigs with my band and needed a convenient way to get my instrument and myself on time to bookings all over the UAE.  A car was required.  The following year, I landed a new job in a part of town I did not want to live.  So I needed a car that could function as a daily commute; newer, more reliable and with a better sound system.  It was also more than three times as expensive as the first car, with the increased costs that went with that as well - such as the service plan and higher insurance.

So if you are trying to decide whether to buy a car, or what car to get, consider the following:

1. Can I move closer to work and either walk or drive less?

2. Can I use public transportation more? What about concepts, such as ekar, where you share a car using an app?

3. How much will the full total costs be?  Do I really want to spend that much?

4. Should I really spend so much money on a car that is just going to lose value as soon as I drive it out of the showroom.

You might still buy the car after you answer these questions -  I did, even if I often regret it -  but at least you're making an informed decision that is right for you.

Dubai school teacher Zach Holz documents his journey towards financial independence on his personal finance blog The Happiest Teacher