Buying a New or Used Car in Dubai: Pros, Cons & What You Should Know

Business & Investments

Buying a New or Used Car in Dubai: Pros, Cons & What You Should Know

What to expect

Dubai is a dreamy city with a unique set of perks to offer. If you just got here and are looking to get yourself a fresh set of wheels or just something to get you from point A to B, you've come to the right place. Dubai has a broad marketplace that consists of cars of all ranges, sizes, and luxury levels, both in showrooms and on resale car lots.

Today we will explore why cars depreciate faster in the Dubai climate, what the bank financing landscape looks like for both used and new cars, and how your situation should decide what you are going to choose. Let’s walk through the pros and cons of buying both new and used cars in Dubai so you can decide what you’re going to go for.

Buying a new car in Dubai, is it worth it?

Pros of Buying a New Car

Buying a new car is always a delight. When you are picking one up from the showroom, you can be completely confident that the car is in crisp and brand-new condition with zero previous owners and absolutely no wear and tear. Since car showrooms mostly keep the latest models, you will receive the latest technology built into your car. Up-to-date infotainment systems, the latest safety features, and even better fuel efficiency.

Manufacturers in Dubai often provide warranties on their vehicles that last anywhere between 3 and 5 years based on the model and the manufacturer. Sometimes these warranties also come with added free service packages, which save you money in the longer run. Banks make it easier for you to buy new vehicles through attractive finance offers such as 0 interest promotions and more. Lastly, you will be able to customize your car in your choice of specification, color, and features based on your budget and liking.

Cons of Buying New

Let us talk about the Cons of buying a new car in Dubai. The cost of buying a new car upfront is going to be a lot more expensive than used. Secondly, if you are only here for a short period of time, do keep in mind that cars lose their value rapidly in the first few years. This means that if you sell your car early, then you will lose up to 30% of what you paid for the car even if it is in pristine condition.

New cars come with higher insurance costs as well. Also, if you’re wanting to customize your car, the wait time is longer, and financing options will carry higher interest rates if there are no promotional offers available on your car of choice. Last but not least, if you default on payments on your financed car, there is little to no leniency in the laws, and your car will be taken away from you. In conclusion, only buy a new car if you are here for a longer period or if the price cut won’t hurt your finances if you sell early. Next, let’s look at the case of used cars.

Section: Used Cars—The Case For and Against

Pros of Buying a Used Car

The best thing about buying a used car is that you will be able to afford a great car at an amazingly affordable price. You will get better models, higher specifications, and more for less money. Secondly, most of the depreciation that happened to the car’s value already would’ve happened while the first owner owned it, and therefore the car will only have minimal depreciation while you use it, giving you a better price when you turn around and decide to sell car .

Next, the registration cost will be the same as a new car but insurance costs are going to be much lower than a new car. The UAE market has endless options to offer when it comes to used cars. No matter what the model of the car, you will always find one in the used car marketplaces in Dubai. Here, you will be able to afford luxury at an affordable price. Last but not least, you can buy modified and customized cars that cost way too much in the new car market. If you are here for a while and are on a budget, have a look around the used car markets of Dubai; you will not be disappointed.

Cons of Buying a Used Car

No matter how attractive the used car market looks, there is always a catch. Cars with prices too good to be true will always have a hidden history of accidents and damage. This will make the quality of maintenance uncertain, no matter how pretty the exterior of a car looks. You have to know that at those prices, the warranty of the car may be very limited or even expired, and the technology that comes with the car will be either outdated or simply worn out. Keep your expectations low about the fuel efficiency as well.

Additionally, the car might come with a higher repair risk when you are uncertain about its history. Lastly, you will more than likely have to be on your own budget since the financing options on used cars are restrictive and hard to obtain.

What should your decision be based on?

Resale Value and Depreciation on your car.

New Cars in Dubai may lose nearly 30% of their value in their first year itself owing to the harsh weather conditions and competitive market over there. Meanwhile, the value of used cars drops a lot slower since most of the depreciation has already taken place. The only exceptions are the high-value cars, such as luxury SUVs and others that retain up to 60% or more of their value even after a 3-year period. The period that you are planning on keeping and driving it should be a deciding factor in your decision to buy a new or used car. Keep the value depreciation of your car in check and don’t sell too early, and if you have to sell the car within one year, then your best option is to buy a used car.

Cost Consideration

Make sure to keep in mind what your budget is when you go around trying to buy a car. New cars are expensive but have easier financing options with lower interest rates and longer repayment tenures (up to 5 Years in Dubai). Meanwhile, used cars have lower upfront costs but come with higher interest rates, shorter tenures, and more restrictions to avail loans. There is also a stark difference between the insurance premiums of used cars and new cars. Lastly, maintaining a new car costs a lot less and is easier than maintaining an old car. Know that you have these three things given below in mind before you decide your budget.

Purchase Cost
Running Cost
Value Depreciation

Usage & Lifestyle Fit

Understand the way you are going to use the car. Is it going to be for commuting inside the city or between cities, determining the distance, and is it a luxury purchase or a family vehicle? If you are looking for the latest technology, long warranties, and minimum issues with the car, then a new car may suit you best, and if you are on a budget and are willing to forego the luxury and tech for “value for money,” then a used car is best for you.

Documentation & Legal Requirements (for UAE context)

When buying a used car, keep in mind that you are responsible for the ownership transfer or the registration with the RTA in Dubai when buying a new one. Make sure you check these things when buying a used car

Service history
Vehicle Inspection
Accident History
Damage History

Meanwhile keep this list in mind when buying a new car

Manufacturer Warranty
Service Benefits
Dealer Inclusions

Notice the timing of the year when people move in or move out of Dubai, such as during festivals and/or the start/end of academic years, for better offers on both new and used cars. Make sure you read bank financing documents carefully before opting in if you are using financing to buy any vehicle.

Quick Comparison between New and Used Cars

Criteria	New Cars	Used Cars
Purchase Price	Higher upfront cost	Lower cost
Depreciation	Rapid early depreciation	Slower depreciation
Financing Terms	Better interest/longer tenure	More restrictive, higher rates
Insurance & Registration	Higher premiums & fees	Lower premiums & fees
Warranty & Technology	Full warranty + latest features	Limited or no warranty; older features
Maintenance Risk	Lower initial risk	Higher risk of repair/maintenance
Resale Value	Less favourable if sold early	Better value retention if good condition

What to think about before the final decision?

Here are a few questions that you need to ask yourself before you decide on what you are going for.

What is your complete budget, including the upfront costs, running costs, and service costs, with or without the financing option?
What is the period for which you are going to keep and drive the car?
What is of more priority to you? Warranties or peace of mind? Value or lower costs?
Do you have a plan to sell your car after you have used it for a while? If yes, how far away is that resale event?

Based on your answers to these questions, you will be able to decide if you should be buying a new car or a used one. Keep our manual in mind while answering the questions we have posed, and you will have your answer.

Conclusion

In short, there is no one option that fits all. Both new and used cars have attractive options for good budgets as well as their own cons and drawbacks. Understand that due to the higher depreciation in value for new cars combined with the amazing variety in the used car market, used cars become a better option for a majority of car buyers. Anyhow, the option should always be based on your budget, your time of stay, and your lifestyle choices. Anything that fits all three of these options is the right one for you; it doesn’t matter if it’s a new one or an old one.