The used-car business is big in the UAE, and you can get a great deal if you look around.
There is no shortage of cars in the UAE. For many, a car is a necessity and, in fact, many families in this region own more than one car. In this scenario, the pre-owned car segment plays an important role.
Dubai Municipality recently launched a new website to showcase its used car complex in Ras Al Khor, also known as the Auto Market. The website has been created after carefully examining each of the 130 showrooms in the complex.
The complex was set up in 1999 and is considered to be the best facility in the region that permits the sale and purchase of used cars at one location. Besides a wide variety of showrooms, it also has a technical inspection area, a vehicle licensing section, an insurance section and even a driving school.
The new website is believed to facilitate the sale of cars through the auction of more than 35 vehicles a week. The creation of such a unique complex is testimony to the strength of this sector.
Jeremy Weatherill, Divisional Manager of Swaidan Automobiles ? the official Peugeot importer in the UAE says, "The used car market in the UAE is expanding at a faster rate than new vehicles. Re-export sales alone equalled the new car market in 2004. Local sales, although not recorded, are sure to equal that figure. This is not surprising given the apparent availability of 'nearly new' cars at considerable savings from new car prices. Anyone arriving in the Gulf, for the first time, is amazed at the low prices of what are considered unaffordable luxury cars in their own countries and will pay strong prices for relative bargains."
Ashish Dham works for Emirates airline and has lived in the UAE for the past 25 years. He knows the second hand market well and has recently sold his Toyota Camry to buy a previously owned six-cylinder Mistubishi Pajero. He says, "I was keen to buy this particular model since it is cheaper than the other four-wheel drive vehicles and it has all the features and specifications I needed. For me this vehicle offers more safety than adventure, though the latter is also not ruled out."
Dham looked at quite a few options before buying his car. "Before going in for a second hand car, one needs to know the showroom price of the vehicle. The estimated depreciation in value is 15 per cent in the first year and 10 per cent in the following years, so those are factors that must be considered. One must also look at different rates of the same vehicle. This can be done by checking the classifieds section of the newspaper. It is also wise to speak to a number of sellers to get a clearer picture of how much the vehicle is worth in the market. One can then reaffirm these prices by going through corporate websites and checking what other people are selling the similar make for."
Expert views
He adds, "Another concern for me is if the vehicle had a single owner or was agency maintained. Agency maintained cars charge a certain premium, which gives the buyer a certain amount of credibility on the vehicle.
"I have also noticed that lady-driven vehicles in the UAE have a general mark up over other cars. However consumers need to do a personal check of the vehicle. This can be coupled with a special inspection that you ask the car dealer to conduct. The findings from these reports can go a long way to determine if the car is worthy of purchase."
Weatherill says that consumers should look at some basic facts before committing to purchase a quality used car. "The first consideration is to check car prices of brand new vehicles and compare the used car price to measure what is the actual saving. The consumer also needs to be able to rely on the 'full service history' provided by the car dealer. Apart from ensuring reliability, this record will determine if any manufacturers warranty is transferable or not.
"Lastly the consumer should analyse if the vehicle has been heavily repaired, or is well disguised which could face problems in passing the next registration renewal inspection."
He adds, " Expat-owned is hardly a rarity or guarantee of quality as 80 per cent of the owners in the UAE are expatriates."
Michael Brightmore, General Manager, Al- Futtaim Automall says, "Lack of official statistics prevents an accurate assessment of the used car industry in the UAE, in terms of scale."
He adds, "What is clear is that the quality of vehicles and services has vastly improved over the past five years. The last few years has seen the introduction of distributor-backed approved used car businesses, spearheaded by Al- Futtaim Automall. This has given consumers the opportunity to take advantage of the cost savings available from used cars whilst having the peace of mind that their vehicle is of a suitable quality and that they have a stable and reputable company to trust to look after their future needs."
Dham suggests one should stay away from a vehicle that has had many previous owners. "If the lower body of the vehicle has been damaged that is an indication of rough use and the vehicle might not be passed by the registration department. Mileage is also an important indicator of how much the car has been used. Cars with very high mileage don't usually fetch a high premium."
Being a car seller as well, Dham knows what consumers are looking for in a car. "Anyone buying a pre-owned car would avoid a vehicle that is not clean or maintained in a certain fashion. I wouldn't buy a car if I have observed that the previous owner hasn't even opened the bonnet and checked if there's sufficient water for the vehicle."
Trustworthy seller
When it comes to advice for customers going in for pre-owned vehicles, Brightmore says, "The seller is far more important than the vehicle, which is why one must buy vehicles from someone they trust. Unless you are a trained auto mechanic with the skills and facilities to inspect a car in great detail, you need to be sure the aim of the seller is a long-term mutually beneficial customer relationship. If you choose to look at a vehicle either privately or from a non-franchised business, you should always take the vehicle to the relevant agency for a vehicle condition report. This small investment is always money well spent!"
Brightmore says there are a few warning signs that consumers going in for a second hand car should be aware of. "Any vehicle from a seller who refuses to allow a vehicle to be checked at the agency should be dismissed from your thoughts immediately. Other than getting expert advice on a vehicles' condition, a 'great deal' is getting a car that you want at a price that you are willing to pay."
He adds, "Only consider vehicles of GCC specifications; manufacturers have spent many years adapting their vehicles to cope with the unique conditions here in the UAE. Imported vehicles may be both inferior in quality as well as having an unknown history.
"Re-sale values of vehicles are a good indication of their quality. Japanese vehicles have a well-deserved reputation for their quality and their high re-sale value reflects this. Headed by Toyota and Honda, the reliability of these vehicles is well established. All manufacturers have increased the suitability of their vehicles for this region in the past few years and both European and American vehicles are now far more reliable than their past reputation would have us believe. What is important to think about when considering buying a used vehicle is the customers' needs and requirements. The main difference between a new and a quality used vehicle is that by taking advantage of the price difference, one can buy the vehicle one wants and not simply just what one can afford."
Weatherill says, "We belong to the very best 'Self Regulatory Network' in the country, namely the original brand import and distribution network, appointed directly by manufacturers to supply new products, provide good after-sales service and build brand image.
Agency-owned cars
"It is a matter of self-interest that agency-owned used car operations ensure they do not sell spurious imports, nor sell damaged or written-off vehicles, or cars with doubtful history or misrepresent 'the brand' in any way," says Weatherhill. It is vitally important to the company and the brand image that real quality and value in used car sales is perceived as underpinning and not undermining the credibility of the organisation. This is not to say no car purchase from an independent or private buyer should be considered, only the risks increase and more care needs to be taken.
"Should a consumer consider such a purchase, it is also worth knowing that most agency workshops will 'inspect and report' on the car (for a reasonable fee) and probably (as original suppliers) have the full vehicle history to verify the sellers claim about the vehicle," says Weatherhill. A simple 'rule of thumb' is that if the price is too good to be true, then that is probably the case."
