Time Out Dubai is your guide to living in Dubai, and as part of our residents' guide we have information on getting car finance in Dubai.
Time Out Dubai staff
1.Get your documents in order. Along with your driving licence ID and passport, you will also need a service or salary certificate, three to six months’ worth of bank statements and an idea of your repayment schedule.
2.The mandatory down-payment is 20 percent, so be sure you have the readies ready.
3. When looking for credit, start with your own bank. You may be more likely to get a better offer if your salary is being paid into the bank in question.
4. Be aware of Sharia compliant finance. The Central Bank of the UAE stipulates that customers must pay 20 percent down-payment and the bank will finance 80 percent of the value of the vehicle. The rate of interest that the buyer pays over the term is calculated by multiplying the 80 percent value by the current interest rate which is currently between 2.6 and 2.79, and multiply that by five years or the term of payment. The bank will add this total to the 80 percent car price and divide it over 60 months. Make sure to do your maths.
5.The average term of the repayment policies is four to five years. Five years is the maximum.
6. Be aware that there is a big difference in the monthly payment amount if you choose to have a shorter pay-back term. However, the longer the paying period the more the interest, so make sure that it’s suitable for you.
7. Missing several payments could lead to the car being repossessed, and the registered owner would still be liable for any charges and late fees.
Renting benefits Car rental is a very popular option, especially for residents that want the freedom to explore the city but don’t want the commitment of ownership. To rent a car in Dubai, you must have a valid UAE driving licence, a copy of your valid passport or Emirates ID, a credit card and be over 21.
Sunil Kumar, general manager of rental operations at Hertz Rent A Car, says that despite rentals slowing down during summer, as the lure of discounts for new and used cars attracts customers to buy, there are still some real benefits to renting. ‘Renting and leasing, versus buying a car, is a decision that must be made with your own strategic objective and financial considerations in mind. Some benefits are fixed cost motoring, driving a new car every few years, lower monthly payments, service and maintenance included in your payments and 24/7 call centre and roadside recovery services. I’d say the cons are that there are too many car rental companies operating in the market, and many companies do not adhere to periodical service and maintenance of their vehicles.’
The RTA is considering car rental as a way to help reduce the number of cars on the road, reduce emissions and increase the use of public transport. The RTA is investigating introducing a Smart Rental initiative, where cars can be rented for up to six hours per day via an app or website. The vehicles would be collected from a public place, possibly near metro stations, and returned to the same place or an alternative designated drop-off point.