Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
UAE
Print
Email
Discuss this article (5 Comments)UAE car giant signs deal to help lower income lending
by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 31 March 2009
LENDING BID: Al Futtaim Automotive has tied up with UAE banks to offer car finance to lower income people amid the credit crunch. (Getty Images)
A UAE-based motoring giant announced on Tuesday it has signed a deal with banks in a bid to stimulate the stagnant credit market.
Al-Futtaim Automotive has entered into an arrangement with leading UAE banks to provide credit facilities for cars to retail buyers who are currently struggling to finance their purchase due to issues such as salary levels.
In recent months, banks and financial institutions have tightened their lending policies, in the wake of the global financial crisis, and stringent criteria such as higher salary limits, are being applied to those seeking loans.
Under the scheme, auto loans will be possible to those customers earning a monthly salary of AED4,000 and above - an improvement on the current typical salary criteria of AED10,000.
The scheme offers customers a zero down payment and interest rates from 5.5 percent.
Colin Leitch, group director, Al-Futtaim Automotive, said: "Lending institutions play a very important role in automobile sales. We are confident that this partnership with UAE's leading banks will help our customers get the best deals with minimum hassle and in turn reinvigorate UAE's automobile industry by turning back the clock to a time when the ability to buy a car was not constrained by financial challenges."
Representing some of the world's most popular and desirable brands: Toyota, Lexus, Honda, Volvo, Chrysler, Jeep and Dodge, Al-Futtaim Automotive supplies four out of every 10 cars on the UAE roads.
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
Car Financing
Posted by Muhammad, Sharjah, United Arab Emirates on Thursday 2 April 2009 at 15:02 UAE time
The salary limilt has been reduced to AED 4000/ for new car buyers, ( latest NEWS ) however the following points remain unanswered:
1.The rate of interest is much higher and how the end user( lender ) will be in a position to repay the loan with a merely AED 4000.00 salary with no down payment(s). This is surely going to create the same problem (s) the banks/financial institutions facing now.
2.The agency officials should adopt the realistic prices for different brands in order to cope this situation as they managed to reduce the price AED 5000 in case of Honda cars.
3.At the moment most of the items are going cheap such as food items, house rentals and house buying etc then what about the other brand new cars and remember after five or six months 2009 models are going to hit the roads.
Please remember that the buyer(s) and seller(s) will both have to go hand in hand to improve the situation and the financial institutions are only a medium to achieve this goal(s).
Posted by Muhammad, Sharjah, United Arab Emirates on Thursday 2 April 2009 at 15:02 UAE time
The salary limilt has been reduced to AED 4000/ for new car buyers, ( latest NEWS ) however the following points remain unanswered:
1.The rate of interest is much higher and how the end user( lender ) will be in a position to repay the loan with a merely AED 4000.00 salary with no down payment(s). This is surely going to create the same problem (s) the banks/financial institutions facing now.
2.The agency officials should adopt the realistic prices for different brands in order to cope this situation as they managed to reduce the price AED 5000 in case of Honda cars.
3.At the moment most of the items are going cheap such as food items, house rentals and house buying etc then what about the other brand new cars and remember after five or six months 2009 models are going to hit the roads.
Please remember that the buyer(s) and seller(s) will both have to go hand in hand to improve the situation and the financial institutions are only a medium to achieve this goal(s).
Offering Autoloans from UAE banks
Posted by Mansoor, Dubai, United Arab Emirates on Wednesday 1 April 2009 at 12:18 UAE time
Its a bizarre decision as on one hand they are on fire from all government corners for firing the UAE nationals and others and on the other hand they are having agreements with local banks for boosting their businesses. Guess they come up with a new idea every day when they wake up in the morning....
Posted by Mansoor, Dubai, United Arab Emirates on Wednesday 1 April 2009 at 12:18 UAE time
Its a bizarre decision as on one hand they are on fire from all government corners for firing the UAE nationals and others and on the other hand they are having agreements with local banks for boosting their businesses. Guess they come up with a new idea every day when they wake up in the morning....
There are few people around to buy new cars
Posted by armanak on Wednesday 1 April 2009 at 09:29 UAE time
The population of Dubai is decresing and further exoected to decrease by June09. So there will not much customer's to buy car and who ever will remain here my suggestion to them is to learn to live in their limits as suggested by colonialB. Booming days propelled by easy and unsecure lending is over not only for UAE but for world economy.
Posted by armanak on Wednesday 1 April 2009 at 09:29 UAE time
The population of Dubai is decresing and further exoected to decrease by June09. So there will not much customer's to buy car and who ever will remain here my suggestion to them is to learn to live in their limits as suggested by colonialB. Booming days propelled by easy and unsecure lending is over not only for UAE but for world economy.
Car Loans
Posted by colonialB, dubai on Wednesday 1 April 2009 at 08:01 UAE time
So, the solution to the problem is to create more of the same problem! We can't sell cars because the world has been brought to its knees by excessively low interest rates and ridiculous lending policies so let's create more 'sub-prime' car loans with corporate lending instead.
The sooner people realise that the paradigm has changed the better. There has been massive de-leveraging and days of easy credit will not come again; if you don't have the money don't buy a new car; live within your means.
Posted by colonialB, dubai on Wednesday 1 April 2009 at 08:01 UAE time
So, the solution to the problem is to create more of the same problem! We can't sell cars because the world has been brought to its knees by excessively low interest rates and ridiculous lending policies so let's create more 'sub-prime' car loans with corporate lending instead.
The sooner people realise that the paradigm has changed the better. There has been massive de-leveraging and days of easy credit will not come again; if you don't have the money don't buy a new car; live within your means.
Click here to post a comment
MORE FROM ARABIANBUSINESS.COM
TOP IN MIDDLE EAST RETAIL
TOP MIDDLE EAST BUSINESS STORIES
ALSO IN MIDDLE EAST RETAIL
LATEST MIDDLE EAST BUSINESS NEWS
- Sport: Westwood extends lead after Race to Dubai's Day 3
- Financial Markets: Saudi index down, banks and petchems weigh
- Real Estate: Merger technical talks to conclude in a month - Emaar
- Banking & Finance: Dubai's Abraaj eyes property investments
- Banking & Finance: Emirates NBD launches bank’s new brand identity
SHARE PRICE CHECK
RELATED STORIES
Market Turmoil Focus
3 stories- EXCLUSIVE: Boeing chairman sees more job cuts in 2010
19 Nov '09 | News - More UAE bank mergers predicted in 2010 - Ethos
19 Nov '09 | News - Dubai property market 'may take 10 years to rebound'
18 Nov '09 | News
Al Futtaim Motors
| 13 stories- Light relief
13 Jan '08 | Features - Deals on wheels
31 Jul '07 | Features
Mobile
