Nine out of 10 UAE residents looking to buy a car this year will choose a second-hand model over new.
Ninety per cent of the 1,150 respondents in a study from online marketplace dubizzle Motors said they would pick a used car, while 65 per cent said they would pay cash compared to 44 per cent who would take out a bank loan. Respondents could choose more than one option when asked their preference.
Amr ElGabry, general manager at dubizzle Motors, said the survey data “underscores the popularity of cash among long-term UAE residents” who want to purchase a second-hand car.
The used-car market has long been popular in the Emirates due to the transient nature of much of the population and the UAE's high depreciation rate, with many residents parting with models in the run up to the summer to tie in with the end of the school year, according to CarSwitch.com, an online marketplace for certified used cars.
“The value of [new] cars take a dip and it’s specifically noticeable in the UAE with cars losing their value by 20 to 30 per cent in the new year and 15 to 20 per cent in the following years,” said Imad Hammad, founder and chief executive of the used-car platform, who says it makes financial sense to buy a vehicle that is one to two years old.
Eighty-five per cent of second-hand cars for sale from private sellers in Dubai and Abu Dhabi are from model years 2008 and above, said Mr Hammad, while 45 per cent are from the 2014 model year or newer with their service contracts and warranties still in place. The data comes from over 10,000 seller requests on CarSwitch.com in December and January.
“Since the older models – those from before 2008 – represent only 15 per cent of the private seller used-car market, the price of a used car remains rather hefty, with two thirds of used cars priced at well over Dh30,000,” Mr Hammad said.
The dubizzle Motors study found residents from the Indian subcontinent account for over half of car seekers, making them the largest audience for second-hand cars, followed by Arab expatriates, westerners and Emiratis.
Mr Hammad said the 4x4 body type is most popular model in the used-car segment accounting for 40 per cent of purchases, followed by sport coupes and hatchbacks at 20 per cent.
Toyota and Nissan remain among the most popular used-car brands with an 11 per cent market share each. Mercedes took third place with a 10 per cent share, while BMW, Mitsubishi and Ford make up the remainder of the favourite brands. However, the most popular used car model in the UAE is the Mitsubishi Pajero.