Whether you’re looking to buy a new or used automobile, it’s important to do your research so you don’t end up losing money.
In order to avoid purchasing a vehicle that isn’t suited to their needs, customers must carefully consider a wide range of options.
The work might be made more difficult by the flashy advertising, smooth sales speak, and “now or never” discounts offered by vehicle dealers.
It’s important to conduct your homework before contacting the vendor of a used automobile.
Dubai-based senior analyst Kiran Viswam remembers a frustrating attempt to buy a secondhand automobile in the year 2021.
On a classifieds website, he saw an Infiniti Q30 for sale at a price far lower than its regular going rate. It had a complete service history and was just a year old, according to the advertisement.
Priced at $17,699, the listing was much below the going cost of about $75,000, or Dh65,000. In his opinion, that was a fair exchange.
An Indian man named Viswam drove the automobile for a test drive and put down a Dh5,000 deposit, but the vendor still wouldn’t let him have a mechanic check it out.
Mr. Viswam discovered the vehicle had been imported from the United States despite having a scrapped chassis number. In addition, there was a history of accidents involving it. But the vendor wouldn’t give back the Dh5,000 down payment.
“Always do a Google search using the car’s chassis number to be sure. You may be able to track out details about past collisions, he adds.
Despite the recession, high-end automakers continue to produce stunning vehicles.
According to a research by data provider Research and Markets, the used automobile market in the United Arab Emirates is projected to expand at a CAGR of 8.3% between 2021 and 2025.
The analysis predicts that by 2025, over a million pre-owned vehicles would have been sold throughout the nation.
According to Statista’s 2017 Global Consumer Survey, around 56% of respondents ranked fuel economy as very important when looking for a new vehicle. The second most popular factor was price, at 46%, followed by safety (55%) and convenience (46%).
The poll indicated that just 32% of people care most about how their new automobile looks, while 43% stated they care most about how well it performs.
Experts in the auto market were polled to identify the most frequent ways that customers waste money while shopping for a vehicle in the United Arab Emirates.
1. Taking into account just the upfront costs
The failure to account for the whole cost of ownership is cited by experts as one of the most common blunders. Customers must consider not just the initial investment but also the running, parking, and maintenance expenses.
According to Marwan Chaar, co-chief executive of used-car dealership Kavak GCC, the next financial issue after purchasing a vehicle is maintaining it throughout its lifetime.
He recommends that consumers should opt for the longest warranty possible to protect themselves financially.
Imad Hammad, creator of auto classifieds marketplace CarSwitch.com, recommends thinking about taking up a service contract up front because of the savings you’ll see.
“These contracts don’t have to be from the official authorities; trustworthy garages will probably be more cost competitive,” he argues.
Expenses for upkeep and repairs should be included in with the price of scheduled servicing. He claims that Chinese, Korean, and Japanese brands are more cost-effective to maintain than European brands due to lower costs for parts.
2. Financing the down payment with a vehicle loan
When applying for auto financing from a bank in the United Arab Emirates, expect to put down a 20% down payment.
Paul Willetts, founder of Gemini Automotive Solutions, an organisation that assists buyers and sellers in the pre-owned automobile market, argues that many people make the error of utilising bank financing to pay for the down payment.
When a consumer has an urgent need to leave the nation, it puts them in a precarious position. According to Mr. Willetts, “they wind up owing the bank a lot more than the value of the automobile.”
“Use your own money for the deposit if at all possible.”
3. It’s clear that there was inadequate investigation.
You may find a wealth of resources online; before making a final decision, Mr. Hammad advises taking into account the whole cost of ownership by comparing the many alternatives under consideration.
Everything from the cost of repairs and upkeep to gas mileage (where hybrids and electrics shine) and eventual resale value is taken into account.
According to Mr. Hammad, “the biggest expenditure of having a vehicle is how much it will depreciate” (i.e., how much money you will have lost) when you come to sell it.
Twenty to thirty percent of a brand-new car’s worth will be depreciated in the first year, and another fifteen to twenty percent annually after that.
Among SUVs, Toyota Land Cruisers and Nissan Patrols have a reputation for holding their value well in the United Arab Emirates. Lincoln is only one example of an American brand that isn’t as good as the competition.
Mr. Chaar claims that a brand-new automobile loses between 15 and 20 percent of its value the day it is driven home from the dealership.
When asked about ways to save costs, he recommends shopping for a reliable pre-owned vehicle.
Mr. Willetts advises that you check the listed price of the automobile against the going rate for similar vehicles to ensure you are getting the most value for your money.
Offerings of freebies and value-added services are fine, but he cautions that they are not really free if the product was already overpriced.
For instance, certain car lots are now 10% more expensive than others, but they throw in free window tinting and a guarantee. To the customer’s eyes, it’s a terrific deal since they’re getting so much for free, but in reality, they’re overpaying for the automobile.
4. There will be no inspections prior to the sale.
Mr. Willetts from Gemini Automotive Solutions believes that pre-purchase vehicle inspections have skyrocketed in popularity among customers purchasing used automobiles in the last three years.
In any of the many Tasjeel centres spread out around the United Arab Emirates, purchasers may have their used automobile thoroughly inspected.
In order to ensure that the buyer’s money is well spent, he recommends that they investigate the vehicle’s past accidents, mileage, maintenance, and overall condition.
Mladen Zivanovic, a 27-year-old Serbian volleyball coach in Dubai, believed he got a fantastic bargain on a Nissan Versa when he paid Dh17,000.
Mr. Zivanovic had just relocated to Dubai and, trusting the seller’s word that the vehicle was in decent repair, spent his life savings on it.
In the United States, Mladen Zivanovic bought an automobile that had been declared a total loss. This image, courtesy of Victor Besa/The National,
After the purchase, he investigated a continuous clunking noise and discovered the automobile was damaged. A examination of the chassis number indicated that the vehicle had originally come from the United States, where it had been involved in an accident and reconstructed using components from other vehicles.
He got Dh12,000 for the vehicle in the end.
Mr Hammad from CarSwitch advises that, “Buying a used car is ideal for your resale economics,” but that prospective buyers should have any pre-owned vehicle examined by a mechanic to reveal any hidden faults.
Mr. Chaar warns against purchasing used cars because of the possibility that the odometer has been tampered with, resulting in an artificially low mileage and a correspondingly high price.
Otherwise, he warns, the purchaser can get a vehicle that’s riddled with mechanical problems and would cost a lot to fix.
Last but not least, Mr. Chaar points out, a consumer might pay more than necessary for a vehicle that has been in a big accident.
5. Neglecting to take into account the current state of the market
Almost-new vehicles, such as 2021 and 2022 models, cost nearly the same as brand-new vehicles right now, according to Mr. Willetts, since supply is limited owing to the worldwide scarcity of semiconductors.
As a result, the price of nearly-new automobiles has been artificially inflated at a time when the supply of new automobiles has drastically decreased.
Although it may seem like a wonderful bargain at the time, waiting two or three months can allow you to save 5 to 10% on a brand-new vehicle. He comments on the relatively high cost of almost new automobiles.