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28 March 2024

Tight auto finance boosts UAE's used cars market

Used car dealers in Dubai and Sharjah are sitting on huge stocks as domestic sales plunged and exports to Africa and Saudi Arabia declined in the past year. (FILE)

Published
By VM Sathish

Used car dealers  in the country claim to be doing brisk business as banks remain cautious in extending fresh auto loans. According to dealers, customers are flocking to the second hand car market as finance for new cars is tight.

“We have reasonably good business now and the depressed market conditions in the used car market are over," proclaimed Suhail M from Al Rizubi Trading, which handles used cars.

Dealers claim there is renewed demand for used cars in the market, especially for less than 10 years old vehicles. "There are more customers who want to buy 2001 and 2002 model Toyota and other vehicles. The dull season is over,” he added.

Used car dealers in Dubai and Sharjah are sitting on huge stocks as domestic sales plunged and exports to Africa and Saudi Arabia declined in the past year.

“Now there is increased demand for used cars because banks have tightened car financing norms and cost-conscious customers prefer to buy old cars. We have many inquiries for used cars from such customers,” he said.

Hisham Mohammed, Manager, Al Ithihad Auction, said the response to its weekly auction has been very good and the used car market is active once again.

“We conduct a car auction every Saturday and there were 450 customers who participated in the last auction. We could sell about 80 used cars and the major demand is for 2008-2009 model Toyotas and Nissans," he said.

"Most of these are cash deals and a participant in the auction has to deposit Dh5000 in advance,” he added, explaining the dynamics of the auction.

The going rate for certain models above 2000 is less than Dh20,000, he said, adding that a 2009 model Toyota Corolla, available for Dh45,000, remained the most sought after model while a 2010 basic model new car will cost Dh60,000.

Other car auction companies also claim to be doing brisk business, getting used vehicles from banks (vehicles retrieved from defaulting companies), insurance companies, taxi and rent-a-car firms, and personal cars.