Car clubs in the UAE have introduced new measures after allegedly suffering losses in millions, as increasingly owners who drive to neighbouring Arab nations fail to return.

According to managers at the Automobile and Touring Club, car clubs in UAE now demand a sponsor, two guarantors, a bank guarantee and cash collateral from owners who seek ‘trip ticket permission’ to drive to neighbouring countries.

Ahmed Mohammed bin Sulayem, Administration Manager, Automobile and Touring Club, UAE, said more than 25 per cent of the cars that they issued permission to travel abroad last year did not return.

The documents issued to take a car out of the UAE. (Supplied)

About 2,250 cars of the 9,000 they gave permission disappeared in Egypt, Lebanon, Jordan, Yemen and Iran.

In fact, Egypt, Lebanon, Jordan impose high tariffs on cars over 1600 cc and in some luxury cars, the tariffs equals the cost of the vehicle.

Sulayem said that Egypt customs department demanded about£12 million (Dh6.2m) from the company, most of which they have paid. The club still has to clear £ 3.2m.

Egypt collected about £68.5m in customs duties from Saudi Arabia Automobiles clubs after cars from the kingdom did not leave Egypt on time.

Similarly, Kuwaiti Automobiles club paid £ 19.8m and Qatar paid £ 9.8m to Egypt.

Sulayem said most of cheques their clients deposit also bounce, leaving them in loss.

 

Earlier a trip-ticket permission was issued on Dh500 and a small cheque. Today, however, the clubs demand Dh10,000 to Dh45,000 for cars travelling to Egypt and Dh10,000 to Dh25,000 for those driving to Lebanon.

Sulayem said passengers can choose between escrow payment in cash or by bank guarantees. Most drivers prefer cash payment so as to evade banking fees which is about 1 per cent of the bank guarantee value.

However, this approach has left them high and dry as the firm claims the number of clients have dropped significantly.

Clients who previously travelled by car, now prefer flights or even buses as they are cheaper compared to the hefty guarantee they need to provide to go drive their cars.

Owners have to exit the country they are visiting within six months with the car, though they can show their exit stamp given by the customs at the border within the year, after returning to the UAE.

After the six-month period the car should re-enter the UAE or the owner has to pay customs duties. As per international rules, if the vehicle does not leave the foreign country within the stipulated period, the firms that issued the trip ticket permission are required to bear the customs duties.

Mohamed Hanafi, an employee at the international club for travel and tourism in Abu Dhabi, said his company does not issue trip ticket permission to those travelling to Yemen, unless they introduce an Emirati sponsor. This sponsor is obliged to pay customs duties if the driver were not to return.

Meanwhile, a car club in Al Ain said they ask for three people to stand guarantee on a single car who are expected to bear the financial responsibilities.

Mahmoud Al-Saidi, an owner of a Hummer who drove to Egypt, said he had to provide three guarantors, including a sponsor. Two of his guarantors also had to deposit cheques.

Ala’a Al-Sayed said he cancelled plans to drive to Egypt because he cannot afford the personal guarantees required of him.

Meanwhile, media reports claim cars that enter Egypt and those reported stolen are usually sold or their spare parts dismantled and sold to garages that buy them to repair vehicles involved in accidents.

Sulayem said his club has been in talks with the Egyptian counterparts to solve the issue and had even contacted the International Automobile Federation (FIA).