By Sam Bridge
Analysis of the UAE's second-hand car market by Dubicars.com has revealed that retained values rose 4-10 percent over the past year
Used car retained values in the UAE are rising for the first time while sales are accelerating, according to new research.
Analysis of the UAE's second-hand car market by Dubicars.com has revealed that prices rose 4-10 percent over the past year.
Craig Stevens, CEO at Dubicars.com, said the research shows there has never been a better time for UAE drivers to opt for a used car.
He said the retained value for used vehicles has increased versus previous years, with a comparable car costing 4-10 per cent more this year compared to 2018.
Collaborating with AlgoDriven, Dubicars has analysed the three million searches its website receives monthly plus thousands of transactions.
It showed that despite costing more, used cars are selling faster. Dealers are selling vehicles 7.5 days faster than in 2018 and privately owned cars are selling in 17.8 days, down by 6.4 days.
Stevens estimated a new car will experience a drop in value of between 15-30 percent within the first year, adding that the research shows the depreciation rate for used cars is slowing down, a trend the UAE automotive market has not previously seen.
He said he is optimistic about the used car market in the next 12-24 months and does not expect used cars will depreciate as fast as they have in the past.
RTA data on registered active light vehicles reports the average age of a car on Dubai roads is eight years.
Stevens said: “The country’s cars are getting older. What that means is people are holding onto their vehicles for longer, choosing to maintain and repair rather than trading their car in for a newer model. This, in addition to a decreased supply of new cars, a 50 percent reduction in new car sales over the last two to three years and increased demand for used cars, has led to the increase in the price of and demand for used cars.”
The data also showed people are making buying decisions based not on the total ticket price of a car. Instead, they are looking at what they can afford to pay each month and are trying to find the best deal that fits their budget.
Stevens added: “I think the changes we are seeing are great news for the industry. The market has been chasing price reductions for too long but, now the market is stable in terms of the demand for new cars, car dealers have a chance to start strengthening and controlling used car pricing. If this is done sensibly, it will enable them to better control pricing on new vehicles as well.
“It’s even better news for consumers. They are going to lose less money on their cars when they sell them.”For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.