Expanding Landscape of Used Cars

 

As the automotive landscape continues to transform in the UAE, pre-owned vehicles are increasingly seen as a practical and cost-effective choice for residents

By Kushmita Bose

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Published: Thu 28 Sep 2023, 12:20 PM

BUYING A USED CAR has always been seen as a cheaper alternative to obtaining a new model right off the production line and it’s easy to understand why. Increasing preference of consumers for vehicle ownership, growing disposable income, and rise in the number of the market players offering affordable, quality used cars are the primary factors driving the growth of the used car market in the UAE.

The UAE used cars market was valued at $20.03 billion in 2021 and is expected to reach $32.07 billion by 2027 with a robust CAGR of around 11 per cent. The used car market is presently expanding especially in Dubai, which gives buyers, more variety of makes and models, and more affordable prices.


Automotive experts say that with so many new cars being introduced into the market each year, it is important to consider buying one used if you want to save money and get good quality and with the right car, you can still enjoy the latest technology and safety features without spending a fortune. Used cars are also easier to maintain than new ones since most of them have already gone through the break-in period when they were new.

The incline towards ‘saving money’ is shaping up to be the next big driver of used-car sales in the UAE and Gulf, as consumers weigh the costs of buying a brand new one vs. pre-owned.


Mobeen Khan, Marketing Manager at Exotic Cars Dubai, highlights that the scarcity of new cars has prompted a shift in consumer behaviour, where the demand for pristine, pre-owned luxury and supercars is seen to be on rise.

“In the current automotive landscape, a shortage in the production of new vehicles has led to higher premiums across all brands. Exotic Cars Dubai has been witnessing an increase in demand for used luxury and supercars. Buyers are recognising the value and allure of these well-maintained, low-mileage vehicles, are turning to the pre-owned market to fulfill their automotive desires. This shift emphasises the enduring desirability of these exceptional machines, as customers seek out quality, performance, and style, even in a market challenged by new car shortages,” he adds.

The UAE's most sought-after used cars continue to be Nissan Patrols and Toyota Land Cruisers, as indicated by Adam Whitnall, CEO of car price comparison platform, Drive Ninja. According to Whitnall, "Land Cruisers and Patrols are extremely popular because they hold a special status in the UAE." He further added, "They are still in high demand, but we are observing a shift with a growing number of people showing interest in electric and hybrid models. There's also a rising trend in the purchase of used Chinese cars compared to the past."

Interest for domestic GCC cars imports have also gone up in the last few months with the microchip shortage impacting the supply of new cars in the market, according to Chris Milbourne, Social Media and Content Manager at dubizzle. “It's not uncommon to see cars with one or two years on the clock selling for the price they were originally purchased for or even higher. In turn, older models are also selling well above historic averages, thanks to the demand-supply dynamics at play,” he says.

“In the last two months, dubizzle cars has witnessed a remarkable 84 per cent surge in overall engagement, both across the affordable and luxury segments. Prominent models of popular brands including Toyota, Mercedes-Benz, Nissan, BMW, and Honda have garnered exceptional views and electric vehicles have enjoyed an eight per cent boost in views.”

“Along with the market leading automobile brands from America, Europe and Japan, the Chinese car brands have also been making a mark in the market for some time now. This year we have seen some of these brands releasing newer models, creating a wider range of options for budget-conscious buyers with compelling prices and excellent warranties,” Milbourne added.

While the UAE has long been associated with brand-new, high-end vehicles, the allure of pre-owned cars has been steadily increasing. Here are some of the factors driving the surge behind used cars:

ECONOMIC CONSIDERATIONS

One of the primary drivers behind the surge in used cars is the cost savings that come with purchasing pre-owned vehicles. The price depreciation of new cars is especially steep in the first few years, making used cars a more cost-effective option for budget-conscious buyers.

CHANGING LIFESTYLES

Urbanisation and changing lifestyle preferences, especially among younger generations, have shifted the focus from car ownership to car-sharing and ride-sharing services. This has led to more used cars being available for sale.

EXPANDING OPTIONS

The used car market in the UAE has grown significantly over the years, offering consumers a wider range of options to choose from. Established dealerships, certified pre-owned programmes, and online marketplaces have made it easier for buyers to find well-maintained, quality used cars.

ENVIRONMENTAL CONSCIOUSNESS

Sustainability has become a global priority, and the UAE is no exception. With concerns about carbon emissions and environmental impact on the rise, some consumers are opting for used cars as a more environmentally friendly choice.



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