UAE: Cars damaged in floods start coming into market for sale

It is estimated that thousands of vehicles were damaged during the heaviest rainfall of the past 75 years

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KT Photo: Muhammad Sajjad
by

Waheed Abbas

Published: Tue 28 May 2024, 6:34 PM

Last updated: Tue 28 May 2024, 10:30 PM

Cars that were damaged during the unprecedented April 16 rains in the UAE have started to come to the open and unregulated market such as classified websites for sale, industry executives said.

It is estimated that more than thousands of vehicles were damaged during the rains, which was the heaviest of its kind in the past 75 years. Insurers are flooded with claims while garages also have long waiting listings.

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Sebastian Fuchs, managing director of digital products and services at Auto Data Middle East, also confirmed that rain-damaged vehicles are entering the market after one-and-half months of record rains.

Sebastian Fuchs. Photo: Supplied

“It has been nearly one-and-half month now and we see that cars that have been repaired are coming onto the market,” he said, adding that the number of buyers versus sellers data compiled by the company, showed a clear trend that there are more buyers in the market now.

“We used to have two brackets of value for cars that people will look into – Dh50,000 to Dh80,000 and Dh150,000-plus. But now the third bracket is opening as people are looking into buying Dh30,000 to Dh50,000 range cars. These are the people whose claims were rejected because they were driving into flooded roads and they are looking for replacement cars. Since they are looking into slightly older models, they want to make sure that they’re buying safe cars,” Fuchs said during an interview with the newspaper.

Abhinav Gupta, CEO of the Gulf region at Cars24, said vehicles that were not badly damaged during the last month’s rains have started entering the market, while the severely damaged vehicles will hit the market in the coming weeks.

Abhinav Gupta. Photo: Supplied

“The rain-damaged cars are very much there as a lot of used car dealers are trying to sell those in the open market. They are trying to liquid through classified websites and unregulated market. A lot of customers are still facing delays in getting their claims as insurers are not clearing. I feel those cars that were badly damaged will start entering the market in 1 to 2 months,” Gupta told Khaleej Times in an interview.

He added that there are quite a lot of distressed sellers in the market, selling on Facebook Marketplace and classified websites.

Another expert, however, said it is too early to assess the impact of such cars hitting the market.

Carlos Montenegro, managing director for the Fleet and Pre-Owned Division at Al-Futtaim Automotive, said many rain-damaged vehicles are currently undergoing repair processes, waiting for necessary parts, or pending inspections from insurance companies. “This delay in the repair and inspection process means that the influx of these damaged cars into the secondary market hasn't significantly begun yet.”

Price drop

Carlos Montenegro said as of now, there has not been a noticeable drop in the prices of pre-owned cars due to the rain-damaged cars.

Carlos Montenegro. Photo: Supplied

“We have rigorous quality control measures in place, which include a thorough triple-check inspection process that ensures all vehicles meet high standards of quality and reliability, effectively identifying and addressing any potential issues, including water damage. By maintaining these stringent standards, we guarantee quality and trust to each of our customers, thereby mitigating any negative impact that rain-hit cars might have on the overall market,” said the Al-Futtaim Automotive division chief.

Rising inquiries

When buying a new car, Abhinav Gupta said people now frequently inquire whether the vehicle is rain-damaged or not.

“It is a routine inquiry so we have listed on our website that all our vehicles are flood-free because people want to know whether this car was flooded or not. Also, we are seeing higher demand because people want to buy from regulated and trustworthy players to ensure that they’re not buying rain-damaged vehicles. In the month of May, we saw much better demand as compared to the pre-rain period,” he said.

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Waheed Abbas

Published: Tue 28 May 2024, 6:34 PM

Last updated: Tue 28 May 2024, 10:30 PM

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