Why buy now: Buying a car is a big financial commitment but motor retailers say now is the time for deals. Mohamed Noweir, managing director of Carmundi Middle East, explains that dealers offer particularly big incentives at this time of year. “Ramadan is always a key point for car dealers in the Middle East, as it is the time of year when a lot of people seek to upgrade their cars. The ‘season of giving’ encourages car dealers to not only lower prices, but also offer a variety of free services and gifts to potential customers. We can see everything from free insurance and car servicing to daily draws with cash prizes. This leads to higher consumer interest in purchasing new cars. Ramadan deals can be so beneficial to dealers that at times they even extend promotions a month longer, so even if you’ve missed out on the deals during Ramadan, you can still catch them until after Eid.”
Gilbert Nassar, general manager of sales and marketing at Liberty Automobiles, adds that deals at Ramadan may not see the price of the car come down but customers can take advantage of added services. “We have some of our best deals during Ramadan and are very generous. We offer flexible payment options and buy back guarantees which means that you can sell the car back to us at a certain value, as well as taking advantage of free insurance, registration and warranty.”
Samee Mitkar, marketing manager of Al Majid Motors Co., agrees that Ramadan can be a good time to upgrade your car, but warns that hagglers might be disappointed if trying to get an even bigger discount at the dealership. “Offers during seasonal campaigns are generally fixed, with little or no room to negotiate,” he says, adding, “however, negotiating further is the right of the individual consumer, but it is very much conditional.”
More motorists are choosing to purchase cars online, a process that allows buyers to compare prices and models faster, ensuring that they get the best price. Marketplace sites such as Carmudi offer customers the chance to shop around for a deal. “You must be careful in order to avoid being tricked. We recommend you use a trusted car classifieds website and never buy a vehicle before you test drive it,” Noweir advises. “We recommend that first-time car buyers take a mechanic with them to check the car to make sure the seller isn’t hiding any problems.”
Purchasing a car requires an outlay of cash, and we asked Samee Mitkar if there was any benefit to paying with cash rather than credit. “Paying cash definitely saves the finance charges and payment commitments on scheduled dates. However, there is not much difference between the cash and credit deals as such, unless it is a volume fleet deal.”
A quick look in any mall car park will show you that Dubai loves luxury cars. An obvious sign of wealth, Saygin Yalcin, CEO of SellAnyCar.com, says supercars are not necessarily out of the reach of all residents. “Compared to other parts of the world, supercars are more affordable in the UAE with the existing rates and financing schemes that are available here. Buyback facilities and guaranteed minimum future value also makes buyers feel more safe buying supercars in this country.”
What to ask at the showroom: “Car shopping is mainly an emotional process. Dealerships will use all sorts of tricks to distract you into buying a car on your first visit,” says Mohamed Noweir, of Carmudi. “Take your time, think about it thoroughly, and come back once you’ve made a solid decision.” He suggests certain key questions to ask at the showroom.
‘How much is the car after additional fees and licensing?’ Go through the contract before you make any payments to avoid finding hidden or mandatory fees that you have to pay later. Asking this question will also signal to salesmen that you mean business and plan to land a good deal.
‘Could you show me all the features?’ Most people hold back from asking this question to avoid sounding like a dinosaur, but there is nothing wrong with wanting to know what your future car has to offer. Most people spend years without fully knowing what their car can really do.
‘What does the warranty cover? Are there any free perks I can get?’ Always get the warranty cleared up. Vehicle repairs and maintenance are the largest contributor in the car business and where dealerships stand to make a lot of money from you. It is important to know what costs you would have to pay, what you won’t be paying, and what you could get free.
‘Can I take the car for a test drive?’ Reading reviews is great, but it’s far better to jump into the driver’s seat and feel how comfortable it is behind the wheel.
How to sell: Selling your car can be a headache, especially for those looking to purchase a new car and upgrade. Considering the cost of the car, plus the money invested in maintaining the vehicle, owners worry that they’ll be left out of pocket. “The resale value of a vehicle is subject to various factors,” explains Samee Mitkar. “The general perception is that well-established brands fetch better resale values, which may not be the case on all types of model the brand represents, but the best volume selling or fast moving vehicles sell quicker than models that are low in demand.”
Owners planning on getting rid of their old cars can sell back to the retailer or use a registered online company to help find a new owner. Whichever method you choose, Mitkar advises owners to keep records. “It is always advisable to keep the periodic maintenance record and history of the vehicle that assures the vehicle’s current condition and leads to a better deal.”
In addition to selling, some may want to trade-in and upgrade. “Trade-in facilities are generally offered by the major auto distributors and is one of the most convenient and stress-free ways to upgrade to a new car,” says Mitkar. Kunjithapadam Rajaram, CEO of Al Nabooda Automobiles, agrees that trade-ins are a good alternative to selling and re-buying. “Customers who trade-in their current vehicle may be able to offset the value against their next car. All pre-owned Audi vehicles go through a rigorous inspection check before it makes the grade as an Audi approved model, so the new buyer has total peace of mind.” In terms of the best time to sell, Rajaram feels that buyers should hold off until September. “I would avoid the summer months when many residents are out of town and would suggest the start of the year and just before school terms begin.”
Learning to drive: If you want to learn to drive in Dubai, you’ll need to attend one of the five authorised driving schools: Al Ahli Driving School (www.alahlidubai.ae); Belhasa Driving School (www.bdc.ae); Dubai Driving Center (www.dubaidrivingcenter.net); Emirates Driving Institute (www.edi-uae.com); and Galadari Driving School (www.gmdc.ae). New drivers will need a valid passport and residency visa, a no-objection certificate from their employer and an eye test and eight passport-sized photos in order for the driving school to apply for a temporary licence for them. Once learners have this temporary licence they can proceed with lessons, to which students are required to bring their card. Learner drivers are also required to pass a theory exam and complete a mandatory minimum of 40 hours of driving lessons prior to taking a practical test.
Getting car finance:
1.Get your documents in order. Along with your driving licence ID and passport, you will also need a service or salary certificate, three to six months’ worth of bank statements and an idea of your repayment schedule.
2.The mandatory down-payment is 20 percent, so be sure you have the readies ready.
3. When looking for credit, start with your own bank. You may be more likely to get a better offer if your salary is being paid into the bank in question.
4. Be aware of Shariah compliant finance. The Central Bank of the UAE stipulates that customers must pay 20 percent down-payment and the bank will finance 80 percent of the value of the vehicle. The rate of interest that the buyer pays over the term is calculated by multiplying the 80 percent value by the current interest rate which is currently between 2.6 and 2.79, and multiply that by five years or the term of payment. The bank will add this total to the 80 percent car price and divide it over 60 months. Make sure to do your maths.
5.The average term of the repayment policies is four to five years. Five years is the maximum.
6. Be aware that there is a big difference in the monthly payment amount if you choose to have a shorter pay-back term. However, the longer the paying period the more the interest, so make sure that it’s suitable for you.
7. Missing several payments could lead to the car being repossessed, and the registered owner would still be liable for any charges and late fees.
Renting benefits: Car rental is a very popular option, especially for residents that want the freedom to explore the city but don’t want the commitment of ownership. To rent a car in Dubai, you must have a valid UAE driving licence, a copy of your valid passport or Emirates ID, a credit card and be over 21.
Sunil Kumar, general manager of rental operations at Hertz Rent A Car, says that despite rentals slowing down during summer, as the lure of discounts for new and used cars attracts customers to buy, there are still some real benefits to renting. “Renting and leasing, versus buying a car, is a decision that must be made with your own strategic objective and financial considerations in mind. Some benefits are fixed cost motoring, driving a new car every few years, lower monthly payments, service and maintenance included in your payments and 24/7 call centre and roadside recovery services. I’d say the cons are that there are too many car rental companies operating in the market, and many companies do not adhere to periodical service and maintenance of their vehicles.”
The RTA is considering car rental as a way to help reduce the number of cars on the road, reduce emissions and increase the use of public transport. The RTA is investigating introducing a Smart Rental initiative, where cars can be rented for up to six hours per day via an app or website. The vehicles would be collected from a public place, possibly near metro stations, and returned to the same place or an alternative designated drop-off point.
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