Used cars in the Middle East: 'It's a minefield out there'

Autodata Middle East chief wants to bring more transparency to the GCC’s market – one of a number of players now competing to offer customers a better service.

Ian Batey is the general manager of Autodata Middle East, a vehicle valuation company that wants to bring more transparency to the GCC used car market. (Photo: Antonie Robertson/The National)

Ian Batey, the general manager of Autodata Middle East, is on a “personal mission”:  he wants to bring transparency to the region’s second-hand car market.

While the vehicle data company has traditionally concentrated on servicing other businesses, its new focus is the consumer and protecting them from being duped into buying unsafe or illegal used cars.

“It’s a minefield out there and my vision is that we will remove all of that mine,” says Mr Batey, who joined the company last November, bringing 16 years of automotive experience from the United Kingdom and the UAE with him.

“Over the next 12 to 24 months, we want to bring a sense of clarity, transparency and trust to the used-car market to make it an 'eyes wide open' industry.”

On Saturday, the online marketplace dubizzle Motors revealed that more than 80 per cent of buyers' bad experiences stem from dishonest sellers, who fail to disclose previous faults with the cars they sell.

And an earlier study from CarSwitch.com, a UAE platform for buying and selling certified used cars, found that 70 per cent of sellers choose to offload their cars via online channels. However, only half of buyers were fully satisfied with the experience and 20 per cent of those polled were concerned about being scammed.

Autodata plans to tackle this lack of transparency in a number of ways – firstly by opening the company’s database up to consumers to give them accurate valuations for any car they plan to buy or sell, and secondly through a series of tools that can help buyers and sellers assess whether a car is legal or safe to drive. And there is more to come, says Mr Batey: “You will see stuff from us that has not been seen in the GCC before in terms of transparency".

It is certainly a move away from the company’s core business, which is to provide the insurance, banking and automotive sectors with accurate valuations of any used car in the market.

While Autodata first launched in 2006, it was not until the firm was bought out by the holding company Skelmore Consulting Group in 2013 that it became the “serious business” it is now, according to Mr Batey.

While 70 per cent of UAE insurance businesses use its data to help to issue policies and avoid over or underinsurance, banks also accept the valuations as part of an underwriting process on loans, while second-hand distributors use the system to benchmark the value of a car.

The database contains 19,000 makes, models and model types and more than 160,000 different price combinations based on the model, model year, trim level and also the mileage and condition of the car.

“Every week we change up to 1,000 values in our database based on market conditions and factors such as the model year change and transactional data from the distributors of used cars,” Mr Batey says.

Now the company is moving into the consumer segment. Its first foray was VehicleCheck.live, which launched  in April offering anyone the value range of the their motor. While the first valuation is free, further checks charge a nominal fee of Dh12 per value query and users can buy bundles of values.

“If you are looking to buy a car online, there are massive variations in price,” says Mr Batey. “So it you want an SUV [4x4], you can go on VehicleCheck.live and check multiple values to see if you are buying or selling at the right price.”

But Mr Batey’s biggest bugbear is the US salvage grey market – cars previously registered in the United States and later declared unroadworthy, that have been exported to the GCC.

“Eighty per cent of used car imports in the GCC are from the US and 60 per cent of those were previously salvage vehicles, so in the US they were gleaned beyond economical repair and yet they are on the road here,” says Mr Batey. “These cars should be scrapped immediately. They are very dangerous.”

While the Emirates Authority for Standardisation and Metrology (EASM) introduced a ban on the import, registration and insurance of vehicles that have been written off in other countries in May, experts say this does not fully address the issue.

Alexander Kappes, the co-founder and chief executive of Scout My Car, which offers buyers a 144-point inspection of a vehicle they are interested in buying on the private market for Dh399, says illicit traders will find ways around the ban.

“A ban does not do that much because some cars are imported as scrap rather than cars,"  he says. “They are then rebuilt and reassembled in garages – so you might have two halves of a car being brought into the UAE that have been declared as scrap and then put back together.

“The majority of the cars that we inspect that come from the US have serious issues and, generally, if we see a US-spec car, we tell the customers to keep away.”

To help to combat this, Autodata is launching VinCheck next month to enable customers to check a vehicle’s history via the US National Motor Vehicle Title Information System. “It is my personal mission is to drive the US salvage grey market out of the GCC and by introducing VINCheck, that is a game changer,” says Mr Batey.

And it is not only the salvage cars that are an issue, he says. Many residents are buying second-hand cars that are not GCC-specified.

“People think they are getting a good deal because it’s cheap but even if it’s never been in an accident before – it’s still not safe for GCC use because it does not have GCC specification and hasn’t been built for our super-hot climate.”

He cites the example of the Toyata Sequoia, which requires 152 mechanical and electrical specifications to make it compliant for this market.

“The tyres are different, the speed ratings are different, the AC is different, and the electrics are protected in a different way,” he says, adding that if someone takes a US-spec car to a distributor it will “cost them a fortune” to fix.

So how can buyers know for sure they are buying a car that is GCC-specified and does not have a poor history?

Mr Batey says the first step is to buy from someone reputable – either directly from a manufacturers' certifed pre-owned programme or from a second-hand dealer.

“We only work with reputable distributors and used-car dealerships that want to protect their relationship with the customer and want to squeeze out the dirty end of the used-car business,” he says.

Another way he plans to do this is through GulfCars.com, a platform Autodata is rolling out this summer selling fully vetted cars from dealers to consumers and ultimately between consumers.

But he has competition.

Imad Hammad of CarSwitch.com was also set up, in 2016, to “tackle that pain point for buyers”. Any cars listed for sale on the platform have been fully inspected with that inspection is published on the site. “We turn down a large proportion of cars that we don’t deem suitable for sale,” says Mr Hammad,

And dubizzle Motors is also trying to offer consumers more reliable options. It lists verified second-hand cars that have had a 90-point check through its partner Expat Wheels. A further 240-point check happens before sale.

“Competition is good,” says Mr Batey. “There is space for us all without overkilling the market. People will buy from us and think they have paid Dh3,000 more than they intended but they know it won’t cost them thousands of dirhams in servicing fees later down the line."

There will be no grey imports on the site, Mr Batey stresses. “We will be offering consumers the chance to get a proper inspection and valuation certificate to maximise their sale.”

Autodata also plans to expand its entire offering across the GCC, starting with Saudi Arabia and Oman and later Bahrain.