Residing in the United Arab Emirates poses a few difficulties. Among them is the purchase of a vehicle, which requires taxes for long-term investment planning strategies, such as foreseeing the resale value of the vehicle.
Both registered citizens and expatriates consider purchasing a vehicle at one stage or another during their stay in the country. Eventually, be it during a relocation or an extended visit, selling the vehicle itself becomes an important factor to think about.
Whether while making the purchase or during selling, people assume the vehicle’s chief value, which can be obtained from the vehicle, is just a figure drawn out of thin air, greatly impacting their realistic expectations of the vehicle’s value.
This is a blatant misconception that is the subject of the blog post, where we will also explore the numerous elements that influence the resale value, alongside guaranteeing that you do not fall into the poorly planned blame of car resale value traps.
What Is Resale Value and Why Is It Important?
Resale value is the estimated price you can earn when you decide to sell your car. Of course, all cars depreciate over time, but the depreciation rate varies across different cars and models.
Why should you consider the price of a car after years of use? Here are the reasons the resale value is an important factor when buying a car:
- Maximized Return on Investment: A higher resale value means you recover more of your initial investment when you sell the car.
- Ease of Sale: Cars with strong resale values have higher demand in the UAE. So, you can sell it more quickly whenever you want.
- Beneficial for Expats: If you are not a resident and want to leave the UAE eventually, a good resale price can offset initial expenses.
So, you must pay attention to the resale value of a car when you want to buy it in the UAE.
Key Factors Affecting Car Resale Value in the UAE
Many factors can influence a car’s resale value in the UAE. Try to consider all of them to choose the best car with a good resale value.
1. Brand and Model Popularity
The most important factor affecting the resale value might be the brand you’re buying the car from.
Some brands are famous for durability, strength, and after-sales support. So, buying a car from them ensures a high resale value.
Here are some of the best brands in terms of resale value in the UAE:
| High Resale Value Brands | Moderate Resale Value Brands | Lower Resale Value Brands |
|---|---|---|
| Toyota | Ford | Peugeot |
| Lexus | Kia | Citroën |
| Nissan | Chevrolet | Renault |
| Honda | Hyundai | Fiat |
| Mercedes-Benz | Skoda |
These brands manufacture many models, and their resale value is different. So, you’d better search for a model with a higher resale value.
Models like the Toyota Land Cruiser, Nissan Patrol, and Lexus LX are particularly sought after in the UAE’s used car market.
2. Vehicle Condition
The condition of a vehicle affects its resale value. Therefore, the car you want to sell should be in good condition, or else you will have to lower your price to attract buyers.
The following pointers need to be taken into consideration:
- Exterior: The vehicle needs to have unbroken paint, no scratches or dents on the body.
- Interior: A vehicle needs to have clean seats, surfaces, and working electronics.
- Mechanical: The vehicle needs to have recent servicing done on it. There should be no major repairs required. The vehicle also needs to be operable throughout all of its systems.
3. Mileage
Lower mileage often leads to higher resale value, because it’s equal to less wear and tear. The impact of mileage on the resale value is different in the life cycle of a car.
Although there is no specific formula to determine that, the following table is a good estimation of the resale value reduction due to mileage:
| Mileage Range | Impact on Resale Value |
|---|---|
| Less than 100,000 km | High |
| 100,000 – 150,000 km | Moderate |
| Over 150,000 km | Low |
Remember that the UAE has a harsh climate, and the cars’ components will get damaged soon. As a result, buyers are extremely cautious about high-mileage vehicles.
4. Service History
If you provide buyers a complete service history from authorized dealers for your car, their confidence will improve. This can increase the resale value of the car.
5. GCC Specifications
Vehicles that are built considering the climate conditions of the GCC region (Gulf Cooperation Council)will last longer. The reason is that they have improved cooling systems and can endure the extreme temperature and dusty weather of Dubai.
As a result, GCC specifications will cause higher resale values. Cars without these specifications have a lower chance to be sold in the country.
6. Modifications
Many people, especially youngsters, want to perform some modifications to their car and personalize the vehicle.
Although the modifications might increase the comfort or performance of the car, they may be risky. The reason is that many potential buyers don’t trust personalized modifications and want only standard, company-made vehicles.
7. Color and Aesthetics
Neutral colors like white, silver, and black are more popular in the UAE and have better resale value.
Unusual and vivid colors may limit the number of interested buyers. So, if the resale value is important to you, avoid buying a red or yellow car!
8. Age of the Vehicle
Depreciation rates are highest in the initial years of a car’s life. Here is an estimation in Dubai:
| Age of the Car | Depreciation Rate |
|---|---|
| 1st Year | 15% – 20% |
| 2nd Year | 10% – 15% |
| 3rd Year | 10% – 15% |
| 4th Year | 5% – 10% |
| 5th Year | 5% – 10% |
After five years, the depreciation rate tends to slow down. So, consider this when buying or selling used cars to avoid financial loss.
9. Fuel Efficiency
Despite the UAE being a fuel-reliant nation, the consequences of fossil fuels on the environment and the cost of fuel are a concern. There is increasing interest in fuel-efficient cars, particularly hybrids, in the secondary automobile market.
Tips to Maximize Your Car’s Resale Value in the UAE
Understanding the factors affecting the resale value of a vehicle in the UAE is important, but knowing how to maximize profits is equally important. Here are some tips that can be incorporated into your approach for selling the vehicle:
- Regular Maintenance: Adhere to the service intervals and document every maintenance action performed on the vehicle.
- Keep It Clean: Make an effort to keep both the interior and exterior of the vehicle pristine.
- Avoid Over-Modifications: Keep the vehicle as close to stock as possible.
- Choose Popular Models: Search for popular cars and those that are famous for reliability in the UAE.
- Monitor Market Trends: Try to sell during periods of high demand and avoid times like Ramadan or peak summer months.
Where to Find and Buy a Used Car in Dubai with Strong Resale Value
Finally, you need to know where to find and buy a car at a fair price in the UAE. Here are some of the best platforms to search for new and used cars in Dubai with realistic prices.
1. Shozon
Although Shozon is a new platform, it has become one of the most popular platforms for finding cars in Dubai.
If you’re looking for used cars with great resale potential, Shozon is your best chance. It specializes in carefully inspected, well-maintained pre-owned vehicles that meet GCC specifications.
2. Authorized Dealerships
Many official dealerships (like Al-Futtaim, Arabian Automobiles, and Galadari) also sell certified pre-owned vehicles. These dealerships typically come with warranties and detailed service histories. However, they can be priced slightly higher than private listings.
3. Dubizzle
This is another popular platform where you can browse thousands of cars in Dubai. It offers a wide range, but buyers need to be cautious. Try to request full service records and get a professional inspection before committing.
4. CarSwitch
It’s an online marketplace similar to Shozon. CarSwitch offers inspected and certified used cars.
Final Thoughts
Familiarizing yourself with the factors that affect automobile resale value in the UAE can be valuable when making purchasing or selling decisions. When calculating the resale value of a vehicle, factors like mileage, make, model, history, and even modifications need to be evaluated. If you plan to sell your vehicle in the next few years, avoid special edition variants. Go for something well-known to guarantee sales at the time of selling. Additionally, confirm the market price of the vehicle through trusted sites like Shozon so that guarantee you are not being charged excessively.
FAQs
Models like the Toyota Land Cruiser, Nissan Patrol, Lexus LX, and Honda Accord are known for high resale values.
Insurance itself doesn’t directly impact resale value. However, a history of claims can influence buyers’ trust.
On average, a car can lose 15% to 20% of its value in the first year and 10% to 15% annually thereafter.
Used cars have already undergone the steepest depreciation. So, they offer better value retention.
Platforms like Shozon, Dubizzle, CarSwitch, and DriveArabia help you estimate your car’s current market value.
